Howard Marks, Co-Chairman of Oaktree Capital.
Courtesy of David A. Grogan | CNBC
Billionaire investor Howard Marks said he was hopeful about China’s economy but warned that China’s growth goals were a huge challenge.
“I remain optimistic about China’s long-term possibilities as long as they execute well and remain constructive to the rest of the world,” said the co-chairman of Oaktree Capital Management.
Marks told CNBC’s Emily Tan on the sidelines of the third Global Financial Leaders Investment Summit hosted by the Hong Kong Monetary Authority that “even though their (China’s) target growth rate doesn’t sound huge compared to history, it’s Still well above average.
China sets growth target of “around 5%” But not until 2024 Bank of America and CitigroupOther institutions expect the growth rate of the world’s second largest economy to be less than 5%.
The World Bank predicts that China’s economic growth will be 4.8% in 2024, and predicts that further decline Despite a series of recent measures to boost the economy, growth will still reach 4.3% next year. Chinese authorities have stepped up stimulus since late September.
The World Bank pointed out that China’s sluggish consumer spending, troubled real estate market and aging population are major problems facing the world’s second-largest economy.
“You can’t grow through stimulus forever,” Marks said. “So their growth rate is going down, their use of stimulus is going down, and they’re trying to design the right mix.” He added that he hopes China Able to meet challenges.
At the beginning of this month, China announces five-year plan 10 trillion yuan ($1.4 trillion) worth of funding to address local government debt while signaling additional economic support next year. Donald Trump’s victory in the 2024 presidential election has raised concerns about increasing tariffs on Chinese exports.
The People’s Bank of China cut the deposit reserve ratio (RRR) by 50 basis points in September to inject more liquidity into the Chinese economy while requiring banks to hold less cash. the same month, President Xi Jinping presided over the meeting It emphasized the need to increase fiscal and monetary support and strive to curb the decline of the real estate market.
“But when there’s too much stimulus in areas like real estate and too many buildings are built, you have to go through a period of adjustment,” Marks said.
