China's economic growth will no longer be driven by consumption of televisions and refrigerators, as visitors demonstrate by inspecting a property exhibition at the China New World Centre in Beijing yesterday.
The expo has had record attendances from people keen to buy before expected price rises triggered by entry to the World Trade Organisation and the 2008 Olympics.
Over the next five years the property, vehicle, travel, financial services and information technology hardware sectors will see the fastest growth, according to Raymond Jook, director of equity research at E2-Capital.
E2-Capital has selected seven small and mid-cap China stocks from these sectors that it believes will outperform the MSCI China Free Index in the medium term. The stocks are car-maker Brilliance China, China Insurance, property counter China Overseas, China Travel, flower grower Euro Asia, GEM-listing SIIC Medical Technology and monitor producer TPV.
Despite China's entry into the World Trade Organisation, some Chinese companies will enjoy exclusive rights for a few years, until the sectors gradually are opened up to foreign competition.
However, Mr Jook said the biggest risks in investing in China-related stocks were the lack of earnings visibility and transparency in connected transactions between a Hong Kong-listed company and its parent.
