SINGAPORE: China’s economy may be slowing but it is “not falling off a cliff”, the chief executive of Southeast Asia’s biggest bank said on Friday.

DBS Bank chief executive Piyush Gupta also said he does not see a repeat of the 1997-98 Asian financial crisis arising from the turmoil in Chinese markets because the region is on a far stronger footing than it was 18 years ago.

A slowdown in the Chinese economy, a sharp fall in share prices and the devaluation of the yuan have hammered financial markets worldwide, underscoring China’s rising role as a global economic growth engine.

“We’re not seeing the country, the economy or demand falling off a cliff,” Gupta said during a luncheon with the Foreign Corres­p­ondents Association in Sin­gapore, referring to China.

DBS is Singapore’s leading bank and the largest in Southeast Asia in terms of assets. “There are sectoral issues, some sectors will suffer and the country is slowing but it is not falling off a cliff.”

Gupta said investors should take a broader look at China’s economy, noting that the drag came mainly from the industrial sector, in particular construction.

China’s services sector, which has taken on a bigger role in the economy, is expanding, resulting in buoyant retail sales, he said. “If you look at the headline retail sales numbers for China, it’s still tracking 10-12 per cent (growth),” he said. “It used to be 12-14, it’s come off a tad but 10-12pc retail sales growth is not dramatically slow.”

Gupta also noted that while there has been a focus on the decline in the purchasing managers’ index (PMI) in the country’s manufacturing sector, less attention has been given to the PMI for services.—AFP

Published in Dawn, August 29th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play