Despite recent signs of a slowdown in China, some economists believe that the worst is over for the world’s number two economy.
According to economists at HSBC, fears of a hard landing for China have been overplayed.
Amid sluggish demand for exports from Western economies, growth in emerging markets such as China and Brazil lost steam in the second quarter of this year.
The HSBC Emerging Markets Index fell to 53 in the second quarter of 2012 from 53.6 the previous quarter.
But with a reading of 50 or above indicating economic expansion, HSBC is taking a positive look at the numbers.
All eyes are on China, with weaker trade data out this week raising fears about a prolonged economic slowdown.
But HSBC said the worst is over for the world’s second largest economy.
It believes that China’s economic growth bottomed out in the second quarter, with 7.8 per cent year-on-year growth.
And it expects to see a pick-up in the second half of the year, taking full-year growth to 8.4 per cent.
HSBC expects China’s central bank to announce another 200 basis-point cut in the reserve requirement ratio for banks before the end of the year.
As for the region as a whole, the lender is forecasting a 6.8 per cent expansion for Asia-ex Japan this year, and 7.5 per cent growth in 2013.
HSBC said the days of double-digit growth for regional economies are over, at least for the next five years.
But economists said that a slower pace of growth is a good thing, as it will mean less volatility, especially for financial markets.