The slowdown in emerging economies, admittedly from very high to more realistic, sustainable levels, could have a knock-on impact on the UK as the world becomes increasingly interconnected, according to Chief Investment Officer Haig Bathgate.
China's economy grew 7.7% in the fourth quarter from the year before, down from the 7.8% figure posted in the third quarter of 2013. China's case is somewhat special in that the government there is deliberately trying to move the country from being a low-cost producer of goods to a more sustainable and slower consumption-led model akin to that of developed markets. The world's second-largest economy also has a massive pile of cash to stimulate the economy if needed, while its currency is still appreciating.
Other emerging nations are not fairing so well; countries such as India, Indonesia and Brazil have seen their currencies slide amid a decline in confidence. The US Federal Reserve's quantitative-easing programme meant that there was lots of cheap money looking for a home and much of that ended up in emerging markets in recent years. The decision by the Fed to now taper QE has led to significant withdrawals from those nations, while the renaissance in US manufacturing, unforeseen five years ago, has threatened the low-cost manufacturing basis of many emerging markets.
Any slowdown in emerging markets could hurt the prospects of companies such as Anglo-Dutch conglomerate Unilever, which reports its earnings this week and sees much of its sales in less developed nations of the world. More widely compelling for the UK is that continental European businesses have made significant inroads into developing nations and a slowdown in emerging regions may affect Europe's economy, which would then have a knock-on effect on the UK.
Haig was speaking on BBC Radio's Good Morning Scotland.
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