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Foreign institutions optimistic on china’s economy, expect strong rebound in 5 months

Foreign institutions have expressed optimism about China’s economic outlook and believe that some industries will be affected by the coronavirus only in the short term.

The Chinese news agency said the institutions added that resilience of the country’s economy remained solid and a strong rebound would be expected in the second half of the year.

The agency quoted Citibank as saying “China’s resumption of work and production is now underway. If the epidemic is effectively controlled, industrial activities will rebound in the second quarter’’.

“With the support of more government policies, the Chinese economy is expected to see a strong rebound in the second half of the year.

“Considering that China’s economy is still more resilient, we believe that A-share investment opportunities are greater,’’ said Wu Jingjing, head of investment strategy at Citibank, China.

Citibank said it was optimistic about companies with Internet factors in the software, e-commerce and entertainment sectors.

“Once the epidemic eases, given China’s high Internet penetration, recovery in these sectors may be faster,’’ according to Citibank.

“The epidemic has not changed the overall recovery of China’s economy in 2020. China’s economic activity and related industries will be affected in the first quarter, and then it may have a V-shape recovery’’, said Ruan Weiguo, an investment director of Invesco.

Charlie Thomas Munger, Warren Buffett’s long-term business partner, had also recently said publicly that he had not wavered in his long-term optimistic stance on Chinese enterprises and the Chinese economy.

Meanwhile, the institutions are generally optimistic about the pharmaceutical and Internet technology sectors and companies in the A-share market.

Fidelity International expressed the hope that although the epidemic might cause frustration in the short-term demand in the technology industry, the structural growth trend of the technology industry is irreversible, thanks to the booming data market. Companies in the cloud data industry chain will benefit.

Given that China’s 5G development will enter a stage of promotion in an all-round manner, Fidelity International said that it was very optimistic about related companies in China’s 5G technology construction and application industry chain. (Xinhua/NAN)

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