Chinese New Year celebrations are well underway, and this month marks the beginning of the year of the black water snake in Sheng Xiao – better known as the Chinese zodiac – inspiring Baring Asset Management to liken the slithery reptile to its country’s economy.

The black water snake’s characteristics - influential, motivated, insightful, and highly intellectual, with a reputation for transformation - are similar in many respects to the Chinese economy in recent periods, the firm said in a statement.

In keeping with the lunar theme, BAM believes that last year’s dragon, with its “moody, broody, maddening male yang energy”, was a distraction during 2012, and was the cause of much frustration amongst investors.

Much like the black water snake, the Chinese economy can be flexible, dynamic and is hard-working, as it looks to achieve superior growth supported by what Baring Asset Management sees as strong fundamentals in the consumer sector, underpinned by rising domestic demand, and a growing middle class.      

“Looking ahead, if the black water snake holds true to form, it is our belief that the behaviour of the Chinese equity market in 2013 should be more suited to many investors than the unpredictability generally experienced last year under the gaze of the dragon - a creature characterised by its dramatic and often volatile nature,” the firm said.

Baring Asset Management predicts that luxury brands, popular restaurants, department stores and the various branches of the technology sector are set to thrive this year. Companies linked to telecoms, smartphone/mobile technology spending, and enhanced 3G activity will all play into an economy which is motivated and believes in being rewarded for its endeavours - themes associated with the black water snake.

The International Monetary Fund puts China’s economy on course for gross domestic product growth of 8.2 per cent in 2013, and 8.5 per cent in 2014, the firm said.