Zhang Yichen, chairman and chief govt officer of Citic Capital Holdings Ltd.

Paul Miller | Bloomberg | Getty Photographs

Consumption, healthcare and technology are three sector picks for investing in China, mentioned CITIC Capital’s high govt on Tuesday.

“For us, the highest precedence … continues to be on consumption, as a result of it is nonetheless rising at the next charge than GDP progress,” mentioned Zhang Yichen, chairman and CEO at CITIC Capital, the flagship funding arm of Chinese language state-owned conglomerate CITIC Group.

China’s GDP growth was 6.1%, down from 6.6% in 2018 because the economic system took a success from its bitter commerce conflict with the U.S.

Talking to CNBC on the World Economic Forum in Davos, Switzerland, Zhang mentioned well being care can also be an essential sector because the Chinese language society is getting old quickly, so there’s strong demand for good health-care providers.

One other potential space for funding is know-how providers because of the potential decoupling with the U.S. in that space, Zhang mentioned.

Within the space of database software program, “no person in China will consider in opposition to competing with Oracle as a result of that is the worldwide, the business commonplace,” he mentioned. However now, “decoupling might occur any minute, you can’t probably run that threat, so there might be home opponents in that discipline as effectively.”

Beijing has been managing a transition of its economic system from an export-driven manufacturing large to at least one lead by home consumption.

Zhang mentioned CITIC Capital has been specializing in “lots of” buyouts in China over the past a number of years to cope with the results that include overcapacity in “nearly each” business in China.

“Consolidation was wanted to enhance the return on capital, therefore decreasing the leverage by the development in cashflow, so buyout is clearly on the rise,” he mentioned.

Going ahead, “most Chinese language companies want to enhance themselves by increasing internationally,” Zhang mentioned.

Nevertheless, “given the general commerce tensions, all of the protectionism on the rise, we’re clearly cautious on that entrance as effectively,” he added.

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