If anything, markets have taken the news as a positive, given that it could have been worse. The FTSE 100 was trading up 1.86% at 5888 by late morning.
According to Nancy Curtin, chief investment officer at Close Brothers Asset Management, despite being unconcerned by confirmation of GDP growth declining, she believes investors will have to keep an eye on news coming from the nation for some time to come.
“The ghosts of China’s 2015 will continue to cast a shadow over global markets this year, and this is unfortunately the unhealthy start we were expecting,” she said. “Weak manufacturing and construction figures have dented confidence, and despite attempts to stabilise it, the Chinese equity market continues to tumble, leading investors to question the efficacy of Chinese policymakers. The latest retail figures are also not helping those concerned that the services sector is not yet growing at sufficient pace to shoulder more of the country’s economic burden.
Curtin noted that there is some light at the end of the tunnel though: “The shift over to the consumer-led economy was never going to be a smooth ride, or happen overnight. Yes, the balancing act will become ever more important as we move forward, and we can expect ongoing volatility while the tightrope is walked. However, there are clear signs that consumer confidence is resilient enough.”