Goldman: Beware EMs, China Will Drag Them Until 2020

China’s enormous, complex economic transition will keep emerging markets under pressure for the next five years, Goldman Sachs has warned.

In report setting out its forecasts on China, the bank told clients to “adjust their exposures” to EM assets.

“The country is trying to shift its economy away from an export-driven and investment-led one to a more balanced, consumption-oriented economy,” Goldman said in the report, headlined “Walled In: China’s Great Dilemma.”

“A complex and interconnected reform agenda has never been achieved on this scale. The transition, if accomplished, is unlikely to be smooth.”

That means China will spur market volatility not just this year, but for the next five years, with emerging markets likely to bear the brunt of the hit, Goldman said.

CNBC

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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