Tags: Blankfein | China | emerging | PMI

Goldman Sachs' Blankfein: 'This Could Be China's Century'

Friday, 24 Jan 2014 08:05 AM

By Dan Weil

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While a decline in China's purchasing managers index roiled international markets Thursday, it apparently didn't have much impact on the view of Goldman Sachs CEO Lloyd Blankfein.

"This could be China's century," he said at the World Economic Forum in Davos, Switzerland, according to CNBC.

To be sure, that doesn't mean there won't be bumpy periods for both China and emerging markets as a whole, Blankfein cautioned, noting investors should treat those markets with caution.

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"We're bulls on China, and I think people should manage expectations in the emerging markets," he stated. "Higher results are usually accompanied with higher risks, and the higher risks are manifest."

The HSBC Flash China Manufacturing purchasing managers index fell to 49.6 for January from 50.5 in December. A reading below 50 indicates a contraction. The statistic helped push stock prices down around the world.

"The policy focus should tilt towards supporting growth," said Qu Hongbin, HSBC's chief China economist in Hong Kong.

The report "implies softening growth momentum for manufacturing sectors, which has already weighed on employment growth," he added.

China's economic expansion slowed to 7.7 percent in the fourth quarter from 7.8 percent in the third quarter.

"Growth momentum is clearly weakening," Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, told Bloomberg. "The slowdown became increasingly clear as the quarter progressed."

He expects growth to continue decelerating this year.

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