Goldman Sachs Wealth Management: "Investors should not return to the Chinese stock market, no matter how cheap it appears"

Investors should not be lured by China's stock markets, which look cheap after last year's steep decline, says Sharmin Mossavar-Rahmani, chief investment officer at Goldman Sachs Wealth Management, according to Business Insider.

"All customers ask us this; given how cheap China seems, is the worst news already priced in?" Mossavar-Rahmani said in an interview on Bloomberg Television, quoted by Insider, adding: "Our view is that it should not to invest in China".

The bottom line for investors to consider is China's trajectory over the next decade, and the country's current economic woes and uncertainty over long-term policy solutions suggest the going will be tough in the coming years, the source said.

"We believe that the pillars of property, infrastructure and exports are substantially weakened and therefore do not recommend that clients move to China at this time," said Mossavar-Rahmani.

Goldman Sachs Wealth Management's chief investment officer said that despite the country's recent "short-term stimulus measures", opaque economic regulations not only bring further uncertainty about when the housing market will bottom out, but also pose a certain limit on the stock market.

The world's second-largest economy has just forecast 5% growth for 2024, after a 5.2% expansion in 2023, but economists are skeptical of this ambiguous target, citing problems in China's real estate sector, the crackdown government debt, the potential slowdown in energy sector investment and weak January-February numbers. China's announced growth of 5.2 percent last year is also viewed with skepticism, Mossavar-Rahmani said, adding that it is likely to be much weaker.

"We don't really understand last year's growth or what this year's growth will be," said Goldman Sachs Wealth Management's chief operating officer, according to Business Insider.