China is well placed to take decisive counter-recessionary measures, meaning that it should be able to lessen the impact of the slowdown. Unlike many developed economies, China has room to expand its fiscal deficit and has already started to put RmB4 trillion of infrastructure spending into action. 

These funds are being deployed in building new railways, highways and ports, and will also be spent on social infrastructure such as healthcare, education and social housing.

As well as increasing public sector spending, the Chinese central bank has cut interest rates and lowered the reserve ratio requirement for banks, increasing the availability of liquidity.  Newton points to recent bank lending statistics which show accelerated loan growth rates, figures which suggest that at least some of the spending is underway.

Newton Investment Management is a London-based global asset management subsidiary of The Bank of New York Mellon Corporation. With assets under management of more than £34.6 billion (approximately $48.5 billion), Newton provides investment products and services to individuals, pension funds, charities and corporations.