Investors look to China in the Year of the Rat

China could well weather a global economic slowdown and offer opportunities for investors.

Analysis by Philip Ehrmann, manager of the Jupiter China and Jupiter Asian Funds, shows while Asian stock markets have suffered in recent weeks, amid fears of a global recession, China should be able to weather the storm.

He said: "We do not believe the long-term secular growth trend in China will become derailed by the problems in the US, as growth is being driven by a process of massive urbanisation.

"The Chinese government will continue spending significant sums on infrastructure to deal with the inevitable social chaos caused by mass migration.

He added: "Environmental spending is another government objective that throws up interesting opportunities."

However, Mr Ehrmann did admit the Chinese government's recent actions to cut inflation had exacerbated the share price volatility already seen.

"Nevertheless, a combination of strong balance sheets, robust productivity and a steadily appreciating currency should partially offset this," he added.

Mr Ehrmann also praised Chinese companies for making themselves more open to investors.

"At a company level, managements are becoming increasingly open and shareholder friendly, with better websites and improved corporate governance.

"It is also encouraging to see company managements paying attention to growth and profit, moving away from the 'profitless growth' of the recent past."

Jupiter now remains positive for the outlook of Chinese firms and is taking advantage of the fall in share prices to pick up some bargains where it has strong convictions.

Firms Jupiter is looking at include: Shandong Weigao, one of China's leading medical product companies; Minth, China's most successful auto component product manufacturer; and BejingCapitalLand, an established property developer.

"We continue to focus on mid cap growth companies for the China Fund, in contrast to the very large companies that have been garnering most investor attention," Mr Ehrmann said.

Elsewhere in Asia he saw opportunities in India, where the recent corrections have "provided an attractive entry point