China to slow, but faster growth elsewhere

Most of Emerging Asia should enjoy a steady recovery in 2014-15 on the back of loose monetary policy and an expected recovery in the developed world. China is the main exception. Recently announced reforms should in time boost growth but, in the short term, efforts to rein in credit growth will sap demand. We also expect India to disappoint, as the government struggles to clear the numerous obstacles that are frustrating investors. Asian financial markets took the start of Fed tapering largely in their stride, and we expect most currencies and equities to make steady gains over the next couple of years.