Why China's hard landing is closer than you think

For years now, we've been told that China is different. But it probably isn't. Instead, it's stock market and property market could simply be part of a perfectly normal financial mania – one that is getting close to its conclusion.

Things haven't gone that well for Anthony Bolton since he came out of semi-retirement to launch the Fidelity China Special Situations Fund. If you'd believed in the China hype and subscribed at the fund's launch, the shares you paid 100p each for would now be worth only 78p or so. You'd be down 20%. And that's not even a lousy performance that can be totally explained by a fall in Chinese shares in general: the MSCI China index is down around 13% over the same period. We've never been keen on this fund (you can read my comments on it at launch: Why you should give thisChina fund a missand my recent interview with Bolton: Buy China and gold, says Anthony Bolton), and we aren't keen on it now. Why? Three reasons.

The first is that we have serious worries about the Chinese economy (more below). The second is that we have serious concerns about the Chinese stock market (iffy corporate governance and too much government control over listed entities). And the third is that the fees on this particular fund are way too high (1.5% plus a performance fee).

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.