- Can China's fiscal stimulus boost its stock markets?
- UK is also walking a tax and investment tightrope.
This month’s featured trusts focus on two areas where there has been much talk of recovery potential. The first trust, Fidelity China Special Situations (FCSS), is included shortly after Chinese equities have benefited from the announcement of significant monetary and fiscal policy stimulus. Questions remain and China faces significant structural issues: a worsening demographic profile, vast municipal and local government debts, more protectionism by the USA and to a lesser extent by the European Union, and the communist party’s unease with allowing the best Chinese companies off the leash to fulfil their potential.
Such problems are hard to shrug off and Chinese equities have fallen back from the initial sugar rush. All eyes will be on whether the measures to restore confidence in the property sector filter through to Chinese consumers and encourage them to spend their savings piles - their reticence to do so having raised the spectre of deflationary pressures.
