China should be ‘more aggressive’ in response to slow growth: Investor

Policymakers in China have to be “more aggressive” in supporting the economy before markets can be convinced that growth will improve, according to one portfolio manager.

Mary Nicola of PineBridge Investments said rising prices and scorching heat in China, which led to power rationing in some parts of the country, will affect economic growth.

“We thought, especially after the lockdown in Shanghai, that the worst would be behind us,” she told CNBC’s “Street Signs Asia” on Tuesday.

“But potentially … with the concerns about inflation, with concerns about the heatwave trickling in, it could mean that the policymakers will have to act a little bit more decisively and increase some of the stimulus,” she said.

Thus far, the government has cut interest rates and taken targeted steps to support the property sector.

“That’s all positive, but in our view, there needs to be something … more aggressive for [the] market to feel a little bit more comforted that growth is going to pick up in China,” Nicola said.

She said China’s growth hasn’t been as strong as expected despite the steps taken by authorities and more needs to be done.

“The key thing here is, as growth slows, that policymakers are going to have to act a bit more responsively, more decisively in terms of something a little bit more than what we’ve seen so far, to mitigate some of that growth pressure,” she said.