HSBC Holdings chief executive officer, Stuart Gulliver, at a conference in London on Friday (16 October) said that fears of China's economy were overplayed. "On balance, I do not believe that China will have a hard landing," he said, in the backdrop of his plans to increase investments in China.
According to the CEO, China would continue grown and outpace global economies. He also predicted that gross domestic product would rise to about 7% in 2015 in line with the target set by the Chinese government.
Meanwhile, a Bloomberg survey -- that includes a median estimate of 25 economist's -- has forecast that the official data due on 19 October will show that China's third quarter growth would stand at 6.8%, the slowest since March 2009. Previously, IMF chief Christine Lagarde had said that China slowdown fears were exaggerated.
Further Gulliver noted: "The last few months have obviously been difficult. But volatility is absolutely natural in any market-driven economy and it should not be allowed to distract from the fundamentals of China's journey."
Stocks across the globe have taken a hit amid concerns of a slowdown in the world's second largest economy in the recent past, which in turn has hurt global expansion. The London-headquartered bank, which is Europe's largest and earns majority of its earnings from emerging markets, has been expanding its asset management and insurance verticals in Asia. It has been focusing on places such as China's Pearl river delta to strengthen its position.
According to analysts at Citigroup, HSBC has risk-weighted assets of about $290bn (£187.8bn,€255.5bn) across the globe, which it would like to reduce before it could redeploy as much $230bn to support Asia and other growth areas of business.
However, a slowdown in China and emerging markets could force Gulliver to change his investment plans resulting in excess amounts being returned to shareholders by way of dividends. Shares of the bank have dropped about 14% this year so far.