China investors will be asking these 3 questions in 2024

cnbc.com:

BEIJING — Despite pockets of strong growth, China's investment story has been overshadowed in the last year by longer-term problems and tensions with the U.S.

Those uncertainties remain as 2024 kicks off. The country is also navigating new territory as it starts to settle into a lower growth range following the double-digit pace of past decades.

Here's what investors are looking at for the year ahead:

For all the geopolitical risks, the attraction of China as a fast-growing market has waned as the economy matures.

Many were disappointed when China's economy did not rebound as quickly as expected after the end of Covid-19 controls in December 2022. Other than in tourism and certain sectors such as electric cars, sluggish growth was the story for much of 2023, dragged down by real estate troubles and a slump in exports.

Several international investment banks changed their growth forecasts for China multiple times last year. After all the back and forth, the economy is widely expected to have grown by around 5%.

«Policy response is essential to solidify the recovery momentum,» Citi analysts said in a Jan. 3 report.

They expect that as early as January, the People's Bank of China could reduce rates, such as the reserve requirement ratio — the amount of funds lenders need to hold as reserves. They also project that overall GDP could grow 4.6% this year.

Beijing has announced a slew of incrementally supportive policies. But it's taken time to see a clear impact.

«We believe property stabilization, a clear exit from deflation, better policy execution and communication would all be necessary for confidence recovery, with stimulus indispensable and good reforms welcome,» the Citi analysts said. «The risk is that markets may not