China’s retail sales boom but sector rewards lag

Overview

Rebalancing the economy towards consumption and away from fixed-asset investment and exports is a fundamental policy goal of the Chinese leadership. China’s household consumption is set for strong secular expansion driven by urbanization, rural development, wage increases, subsidies and the introduction of a healthcare scheme that will reduce precautionary saving. We believe that although Chinese retailing is a strong long-term story, portfolio investors will have to wait for returns....