With pessimism in China and optimism in India, confidence seen key to economic puzzle
- Economist Helen Qiao compares the differing levels of confidence in China and India as a key agenda-setting meeting looms for the world’s second-largest economy
A lack of confidence and low expectations for China’s economic growth remain major hindrances holding back consumers and investors, economists and veteran policy observers warned ahead of next week’s agenda-setting third plenum.
Pessimism from economists and observers inside China about outlook of the world’s second-largest economy could send a chilling message to overseas observers, according to Helen Qiao, chief Greater China economist at Bank of America Merrill Lynch.
“In China, no matter how much we tell investors that China has no problems, that China will surely ramp up the implementation of future policies, the overall feedback we got from investors was pessimistic, and they treat good news as if it won’t happen, and bad news as if it will get worse,” Qiao told a Tsinghua University forum about China’s midyear economic update on Saturday.
Qiao, who is also the bank’s head of Asia economics research, added that the atmosphere among investors in India was completely different, with economic growth and momentum being hyped up.
Sometimes [the market atmosphere] is driven by emotions, especially now when investors are easily swayed by the market
The market capitalisation of the Indian stock market has surpassed Hong Kong to become the fourth largest in the world.