Renewed worries about China look overdone

Concerns about China’s economic prospects have rattled investors in the past few days.  However, we think China’s economy will pick up in the coming months. Overall, the latest economic data do not point to a slowdown in activity, credit growth has accelerated and more policy stimulus is in the pipeline. Meanwhile, advanced economies ended 2015 on a reasonably positive note. Business surveys point to an acceleration in GDP growth in the euro-zone in Q4. In the US, growth seems to have slowed a bit late last year, but prospects still look fairly bright. And even in Japan, GDP should have risen modestly in Q4. Overall, a combination of loose monetary policy and rising household spending should be enough to keep the world economy growing at a steady, if not spectacular, rate over the course of this year.