"China is in the early stages of going from a long period where it was all about the quantity of growth, into an era where the focus is on the quality of growth," said O'Neill, the chairman of Goldman Sachs Asset Management who coined the acronym BRICs nearly a decade ago now.
China's GDP is expected to average growth between 7 and 7.5 percent over the next five years, according to most economists. While that's a lot less than the 10 percent it was getting over the last 10 years, the size of the Chinese economy, coupled with Beijing's ability to direct the economy away from major troubles make it less cumbersome than large and chaotic democracies like India, the oligarchical and aging society of Russia, and even Brazil, which will grow less than the U.S. this year despite not having suffered any of the problems facing the Western economies.
China's government is trying to move the country away from an export driven economy to one that focuses more on domestic consumption. Meanwhile, Beijing's goal is two-fold: full employment and social stability. The aging population requires better medical care and a social safety net, something China still lacks in comparison to wealthier Asian nations like Japan.
But as China matures, O'Neill told conference attendees that he expects consumer-related and health care companies to benefit, while those that depend on heavy industry production and heavy industry commodities were likely to lose out. He said China's A-shares will likely rise over the next year, and disagreed with mainstream financial pundits who are saying that China's growth story was behind us.
From the Forbes BRIC Value buy list in China, top buy recommendations as made by ValuEngine are Mindray Medical (MR), Baidu (BIDU) and China Mobile (CHL).
