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He believes investors will eventually recognise India for its strengths and merits, which will encourage them to refocus on the country.
“The Indian economy has been strong. We are still seeing, should we say, emerging market growth and economic growth levels in India, whereas China, of course, has been disappointing over the last couple of years. So, investors are likely to see through that and to keep investing in these markets,” he said in a conversation with CNBC-TV18.
Harris explained that while China has seen some significant developments, the shift in investment is likely a short-term reaction.
China’s top economic planner is set to announce another package of policies on October 8 aimed at boosting economic growth, with investors hoping for further stimulus from President Xi Jinping’s government.
This follows a recent wave of measures, including interest rate cuts and liquidity injections, just before a weeklong holiday.
Also Read: China may announce a second stimulus package on October 8
The Chinese stock market has responded positively, with the Hang Seng China Enterprises Index climbing over 30% in the past month.
However, there are concerns about the sustainability of the rally, given past instances where initial gains fizzled out.
Many foreign investors, especially from Europe and the US, tend to focus on their regions and often view emerging markets (EM) as one large group. Some of them may reduce their investments in India and increase their focus on China, Harris noted.
Also Read: Money is moving from India to China, says Adrian Mowat
On October 2, Jefferies’ Chris Wood, one of the biggest optimists on the long-term India story, cut his weightage on India by one percentage point and increased it on China by two percentage points. He, however, retained his “overweight” stance on India.
Also Read: China economic agency plans briefing as investors eye stimulus
For the entire interview, watch the accompanying video
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