China research trip – A look at the Chinese property market and shadow banking sector

There is a lot of debate surrounding the future of China’s economy. There are the pessimists, who will cite the inevitable collapse of a debt-powered housing bubble.  There are others that say these concerns are overblown and that despite slowing, China is still the world’s second largest economy and its growth rate is far superior than anything seen in the developed world.

From time to time we visit China in order to try and work out for ourselves what the future could hold. China is such an important part of the global economy, it is vital that investors in bond markets have some understanding of the fundamentals that drive the Chinese economy.

Our last video on China highlighted the differences in the banking systems of the US and China and what lessons policy makers in the West could learn from the Chinese authorities. More recently, Matthew Russell (M&G Fund Manager) and I went to Beijing on a research trip to find out more about the current state of the Chinese economy. In particular, we wanted to develop a better understanding of two areas which are often looked upon as potential trouble spots: China’s property market and its shadow banking sector. We’ve put together a video to share some of our thoughts on these and related issues.


The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Wolfgang Bauer

Job Title: Fund Manager

Specialist Subjects: Investment grade credit (and the mysteries of microfluidics…)

Likes: Football, scuba diving and jiangsu cuisine

Heroes: Alfred Wegener, Charles Darwin and Stanislav Petrov

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