Market Overview

China's Upcoming Economic Moves With David Riedel

David Riedel of Riedel Research Group, which focuses on equity research across key global emerging markets, discussed why he believes China's economy needs to invest in a better safety net on CNBC's Squawk Box Monday morning. 

"The demographics of China absolutely demand it," said Riedel regarding China's development of a stronger safety net. 

"They've got more people retiring. It's the fastest aging [population] in the world." 

As leaders in China are meeting in talks on what many believe to be about advancing significant economic reform, and their growth rates continue to stir conversation, many are wondering how the country plans to move forward with ensuring economic stability across a diverse set of expanding classes. 

Riedel is confident that if the safety net is there, then the people of China can be more "consumer orientated," which he thinks is what the country truly needs. 

"They are gonna manage this transition towards a more domestically orientated, consumption-focused economy, which is going to mean slower percentage growth rates because of the law of large numbers," said Riedel. 

Related: Coca-Cola to Invest Over $4 Billion in China

According to Riedel, some of the major talking points will be on the development of rural economies, land ownership, which he notes is a big deal for China, and "a continued focus on urbanization." 

Despite growth plans etched out over years, changes can be made that could push things either the left or the right, Riedel said, while including that some developments will include increased freedom of mobility among workers and increased land ownership by "peasants."  

He thinks that the chances of opening up Chinese markets to more foreign investors is low since they're able to adequately meet their own needs and are comfortable maintaining control of their domestic economy. Riedel said that the impact of the 2008-2009 "developed world downturn" on China's economy reinforces their decision not to open out to outsiders. 

Jason Cunningham had no position with the mentioned entities while writing this article. Visit Jason on Twitter at @JasonCunningham and @Benzinga.

Posted-In: CNBC News Emerging Markets Politics Global Economics Markets Media Best of Benzinga

 

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