Reduced risks in the property sector and for local government financing vehicles suggests the costs of supporting the nation’s ongoing industrial upgrades are also manageable, underpinning growth, he said.
Morgan Stanley is turning more bullish on China’s banking sector, saying global investors are too pessimistic about the impact of the nation’s property downturn and weak economy on profits.
Measures by policymakers in recent months have put a floor under the real estate market and will cushion the risk exposure of lenders, preventing any worst-case scenarios, according to Richard Xu, the US bank’s chief China financial analyst.
