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Investment Director Kelly Chung's outlook includes a turnaround in China - and less rosy prospects in Europe and the US. In 2023, her company Value Partners Group, a large Asian asset manager, will prefer equities over fixed income overall, she says in the following commentary:

2022 was a very volatile year. Geopolitical events and inflation were in focus in developed markets. All asset classes except the US dollar and selected commodity prices have been hit hard in 2022.

The positive correlation among asset classes has been one of the highest in history, and investor positioning has become very extreme. The volatility in currency added to the difficult investment environment. 2023 will continue to be another volatile year.

The US and Europe will be facing higher recession risk. Inflation will remain high and central banks need to continue to tighten. The governments in the US and Europe will find it more difficult to use fiscal policies to support the economies when their monetary policies are still in tightening mode. Therefore, the US and Europe will likely head into recession, especially Europe, which has a high chance of going into stagflation.

China faces a different economic cycle

On the other hand, China faces a different economic cycle. After facing some very hard times due t......................

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