Fears for China’s economy overplayed, says HSBC

Volatility in China’s markets is inevitable as it implements reforms and its economy is unlikely to have a “hard landing,” HSBC chief executive Stuart Gulliver said yesterday.

“The fears for China’s economy are overplayed. I do not believe China will have a hard landing,” Gulliver said in a speech on the country in London.

“The last few months have obviously been difficult. But the fluctuations and stockmarket volatility have little or no bearing on the long-term trends around China,” he said.

He said HSBC still expected China’s economy to increase about 7% this year and said the world’s second largest economy “will continue to outpace global growth”.

China’s decision to allow its yuan currency to move more freely and sluggish exports and slowing growth have raised concerns about its economy, and spooked investors there and wider.

Gulliver, whose bank is based in London but was founded in China and makes most of its money in Asia, said it was part of China’s reform path.

“China is part of the way along the path of reform. It is attempting a transition that is far from straightforward.

“China should and will continue to ease controls in a steady and measured manner,” he said. n Reuters