China's growth tipped to slow further next year

December 02, 2019 17:03
Gao Shanwen expects China's economy to slow further in 2020, but he remains optimistic on the prospects for A-shares. Photo:

Gao Shanwen, chief economist at Essence Securities, said in an internal speech last week that China's economic growth could fall to a range of 4-5 percent.

As one of the top economists in China, Gao's opinions are highly valued by authorities. Premier Li Keqiang had even invited him to economic meetings.

Gao graduated from Peking University, and had a stint in the Development Research Center of the State Council before moving to the private sector.

His reports are mainly targeted at policymakers, business executives and fund managers. He is also a member of the China Finance 40 Forum, an influential financial think-tank in China.

Gao made his mark by correctly foreseeing the bull market in China's A-shares in 2014. He then issued warnings when the market got overheated the following year.

Gao was also one of the few to predict that the country’s GDP growth rate would approach the 6 percent level this year.

Given the impact from the US trade war, a slowdown in reforms, the waning effect of stimulus policies, and decelerating domestic demand, Gao sees even lower growth clip in the coming year, somewhere between 4 to 5 percent.

Interestingly, he is not bearish on A-shares.

"Economic transformation and opening-up will level the playing field and create an open and fair market environment. That would create structural momentum for share prices, which has yet to be fully recognized by capital markets," said Gao.

Despite the positive underlying tone, his speech, which had gone viral for about a day, was taken down, showing that opinions that do not toe the line are still not quite tolerated by the authorities.

This article appeared in the Hong Kong Economic Journal on Dec 2

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist