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FERI (Schweiz) has a unique expertise in asset management and advisory services for discerning clients. The sustainable quality concept is based on the quality investing approach, in which financially sound companies are identified through targeted selection on the basis of various quality characteristics.
Artificial intelligence (AI), the Internet of Things (IoT) and 5G – exponential technologies will trigger a wave of transformation in society and the environment in the coming decades. FERI (Schweiz) offers the opportunity to actively participate in these developments and to invest in an innovative concept.
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FERI (Schweiz) offers clients a range of advisory services and individual investment solutions to give them clarity as to how compatible their investments are with the United Nations Sustainable Development Goals (SDG) and increase their understanding of this at the different levels of the investment process.
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Economics Update October 2024 - Price fireworks despite the crisis: China's economy likely to see only a temporary growth spurt

Bad Homburg, 10/8/2024
by Axel D. Angermann
  • Support measures are not sufficient for a general solution to the real estate market crisis
  • 5% growth in 2024, but no fundamentally higher trend
  • High economic growth is still not a priority for the Chinese leadership

The interest rate cuts decided by the Chinese central bank and the measures announced by the Politburo of the Communist Party to support the economy have triggered a price explosion on the Chinese stock market since the last week of September. However, it is not yet clear that this stimulus will actually lead to a sustained upturn in the Chinese economy. The challenges currently facing the Chinese leadership are too complex for that. 

China's economy in the liquidity trap

The government's decision to reduce the excesses that have arisen in the real estate sector over a long period of time has resulted in real estate prices falling for around two years. This has led the Chinese economy into a liquidity trap: falling interest rates are not leading to a revival in investment activity because the players are expecting prices to continue to fall in view of the high oversupply of housing. Contrary to what was intended, this has triggered a chain reaction with serious consequences for the economy as a whole: Due to the loss of assets resulting from falling real estate prices, private consumption is also massively impaired, which in turn considerably slows down overall economic momentum. The attempt to counteract this by increasing exports is only successful to a limited extent because the global economy as a whole is weakening and both the US government and, more recently, the EU Commission are taking measures against the flooding of their markets with cheap Chinese products.

Restructuring the real estate market needs more time 

The steps taken so far to stabilize the economy have only been successful for a short time. For example, the central bank made 500 billion yuan available for the purchase of vacant apartments by local state-owned companies, of which only 25 billion has been used so far, as the business is apparently unattractive for the companies. There is also resistance from homeowners who fear lower market prices in the long term and an unfavorable change in the social structure of their neighborhoods if a large proportion of the houses are rented out as social housing. A major central bank programme, as was last the case in 2015, would be necessary to stabilize property prices in the long term. The current measures fall well short of this and are primarily aimed at achieving the GDP growth target of 5% and preventing the economy from slipping further. However, this target is likely to be achieved, especially as the leadership has promised to expand the measures if necessary. However, it is unlikely that growth momentum will be significantly higher in the long term: there are no signs that the Chinese leadership under Xi Jinping has fundamentally changed its priorities, and these priorities do not lie in high growth momentum, but in the most comprehensive control possible and the pursuit of specific goals to strengthen (global) political ambitions.

The lack of reaction of the oil price to the new support measures was revealing: If China's economy were to actually move onto a higher growth path, experience has shown that this would have caused the oil price to rise significantly, as China remains one of the largest consumers of oil. In view of the dramatically low valuation of Chinese equities to date, there is a tactical opportunity for professional investors. However, the strategic outlook remains subdued.


About Axel D. Angermann

As Chief Economist of the FERI Group, Axel D. Angermann analyzes the economic, monetary policy and structural developments of all markets that are important for asset allocation. His analyses form the basis for the strategic orientation of FERI's multi-asset strategy, for which the CIO of the FERI Group, Dr. Marcel V. Lähn, is responsible. Angermann himself has been responsible for FERI's analyses and forecasts for the overall economy and the international financial markets since 2008. He joined the company in 2002 as a macro analyst. His professional career began at the Max Planck Institute for Economics and the German Chemical Industry Association. Angermann studied economics in Berlin and Bayreuth.

About FERI

The FERI Group, headquartered in Bad Homburg, Germany, was founded in 1987 and has developed into one of the leading multi-asset investment houses in the German-speaking region. FERI offers tailor-made solutions for institutional investors, family assets and foundations in the business areas:

Founded in 2016, the FERI Cognitive Finance Institute acts as a strategic research center and creative think tank within the FERI Group, with a clear focus on innovative analyses and method development for long-term aspects of economic and capital market research.

Together with MLP, FERI currently manages assets of around EUR 60 billion, including around EUR 18 billion in alternative investments. In addition to its headquarters in Bad Homburg, the FERI Group also has offices in Dusseldorf, Hamburg, Hannover, Munich, Luxembourg, Vienna and Zurich.



Media relations contact

Marcel Renné

Chairman of the Board & CEO

Rathausplatz 8-10

D-61348 Bad Homburg

Axel Angermann