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Cherry Reynard says China ’ s dominance means investors should seriously think about separating it from their core emerging markets exposure
Exit the dragon
One of the myriad
consequences of the pandemic is likely to be an acceleration of China ’ s economic dominance . It has for many years been second only to the US in terms of its contribution to global GDP , but as the only major economy to grow in 2020 , it is fast catching up . Investors have taken note and emerging market indices have become more Asia- and China-centric . In a recent paper , Invesco pointed out that Asia now represents approximately 70 per cent of the MSCI Emerging Markets index , while Latin American capital markets have mirrored the slide in the region ’ s economies , now representing just 13 per cent of the benchmark . This has left some structural
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