China manager reveals sectors to prosper from new regime

Disappointment in the West over what is considered to be a more conservative than reformist new leadership in China is misplaced, believes BlackRock's Jing Ning.

The manager of the firm's BGF China fund says many Western commentators have missed an important signal in the appointment of Xi Jinping as chairman of the powerful military committee: power is now being consolidated around the younger generation.

Ning believes the party is laying the foundations for a more reformist committee which will pave the way for a host of new investment opportunities.

'We anticipate reforms in areas such as central governmental functioning vis-à-vis local government; environmental protection and the accurate pricing of resources; financial and pension markets; urbanization and the Hukou, local residency system.'

However, the China equity specialist said that whilst the new leadership may start pushing for some reforms early, significant policy announcements of key structural reforms are unlikely to be announced until after the National People’s Congress in March, when the new government will be officially formed.

'Even so, the economic and corporate situation in China seems to be improving. As such we are expecting to see corporate earnings upgrades as we go into 2013.'