Is six-percent third-quarter growth a fair warning for China? David Mann, Global Chief Economist at Standard Chartered Bank, said that the bank's base case is that it sees 6.2 percent growth this year as well as in 2020.
Read more: China's GDP grows by 6.2 percent in first three quarters
"We're seeing a lot more effective support coming from fiscal policy to actually counter the impact from the prior deleveraging drive as well as from the U.S.-China trade war," said Mann. He expected China to fulfill the achievement of doubling its GDP in 2020 versus 2010, but warns that China's economic growth will decelerate from 2021 onward mainly due to the aggressive pace of aging.
The market has been making a one-way bet on the yuan amid trade pressure. Mann said that should not be the case as ultimately it's up to the economic fundamentals. He said the yuan could be up as cheap as 7.28 versus the dollar and grow moderately stronger if trade talks can lead to more positive than expected deals.
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China and the U.S. have made a preliminary deal, opening doors to a bigger deal in 2020 that will come with more details and be much more comprehensive. Acknowledging the positives, Mann warned that investors should be wary of the tail risks, as the trade talks may not necessarily go in the right direction. But he reckoned that there will be more positives regarding trade negotiations in 2020.
When asked about global risks ahead, Mann said he is expecting a more positive picture for global recovery in 2020. He said more aggressive fiscal policy both from China and India will support growth, so will the dovish tone of global central banks.
"There might be actually some slight cyclical positive news to report compared to just how bearish everyone's expectations have now become," said Mann. But it doesn't mean investors can rest assured.
Mann added that advanced economies, Japan and Europe in particular, might have already been overdrawn on monetary easing measures. That leaves a big question mark on how much more aggressive these central banks can go with monetary easing.
"That's something we need to take more seriously than ever before," said Mann.
(CGTN's Xia Cheng also contributed to this story.)