Speaking at a press briefing earlier this week, Lee, who manages the Baring Asia Growth Fund and Baring Eastern Trust, said: “Asian economies tend to be good students, a lot of them have current account surpluses. Asia has a high savings rate and they have fiscal surpluses.”
He remains optimistic about the Chinese economy, stating that although it is likely to experience slower growth in the coming years, there are still opportunities for Barings’ funds to pick stocks in well-performing industries currently exploiting the rise of Chinese consumerism.
He said: “The Chinese consumer has progressed a long way in a relatively short amount of time.”
Consumer drive
“When GDP per capita reaches above $10,000 (£6,900, €8,850), which it will do in about five years from now, certain sectors have been shown to outperform such as healthcare, cosmetics, tourism and education.
“There is a lot of negativity bordering on scepticism about the Chinese economic outlook but parts of the Chinese economy are doing really well and that’s where we are investing.”
Referring to a report published by Barings on the position of its Eastern Trust fund, Lee pointed out that the booming cosmetics industry in China is proving a great investment for the fund.
Surprisingly, South Korean makeup brands such as Amorepacific have emerged as key players in the industry, having experienced phenomenal growth in recent years in China with sales surpassing those of French powerhouses such as Chanel and Lancôme – the largest exporters to the market.
Botox and dermal fillers
Research by Barings found that another area for strong growth is the market for aesthetic injections such as Botox and dermal fillers which is likely to increase globally, with much of it happening in Asia and other emerging markets.
Lee said: “In the healthcare industry, particularly in the case of aesthetic injections and dermal fillers. Asian companies are becoming more and more integral to the global economy, not only in terms or size but in terms of being actual leaders in their respective fields.”
Electric vehicles (EVs)
Despite historically low oil prices, Barings figures show that demand for electric vehicles (EVs) in China is growing dramatically as its auto market looks to invest in alternative technology to meet the ever stringent government emissions targets.
As a result, this is likely to lead to a strong growth in companies manufacturing the lithium battery used in the production of EVs.
Driverless cars
Another area of high growth in China are companies investing in Advanced Driver Assist System (ADAS) otherwise known as driverless cars which are particularly attractive to governments looking to implement standardised vehicle safety features.
