China has posted better-than-expected growth figures for the opening quarter of 2014, leading some to question whether fears of hard landing in the world’s second largest economy have been unrealistic explains Richard Cayne Meyer Asset Management Ltd.

Data from China’s National Bureau of Statistics shows the country’s gross domestic product expanded by 7.4percent in the three months to the end of March, when compared with the same period in 2013.

Although this was down from the 7.7percent recorded in the final three months of 2013, the rate was higher than the 7.2percent forecast by analysts. At 7.4percent, growth is at its slowest since the third quarter of 2012.

Richard Cayne Meyer explains that Investor sentiment towards China has taken a beating over recent months after concerns mounted that the economy would go into a so-called hard landing. The Bank of America Merrill Lynch Fund Managers Survey for March showed this has recently improved, with the balance of asset allocators expecting the economy to weaken moving from 47percent to 34percent.

Schroders emerging market economist Craig Botham expect Chinese growth to slow further in the coming months.

“Financing conditions remain tight and the property market looks soft, and there’s not yet any obvious positive offset. Hopes of stimulus are overblown as we don’t expect to see more than minor measures aimed at supporting, not accelerating, growth,” Botham says.

“At this point the government seems comfortable with the growth rate; major stimulus was ruled out last week, most likely in full knowledge of the first quarter growth numbers. Headwinds will continue to slow China’s dash for growth over the rest of this year.”

Richard Cayne Meyer points out that Capital Economics China economists Qinwei Wang and Julian Evans-Pritchard say today’s GDP figures strengthen the argument that fears over a Chinese hard landing are “overdone”.

“The economy is likely to weaken further on the back of slowing credit and property investment,” they write in a note.

“However, with consumption holding up relatively well, export demand warming and infrastructure investment possibly bottoming out, a sharp slowdown should be avoided. This makes the stimulus that many are expecting less likely.”

Wang and Evans-Pritchard point out that activity data, including industrial production and the output of electricity and cement, was “relatively upbeat” for Match and add to evidence that the country will be able to avoid a hard landing.

Capital Economics predicts that the Chinese economy will grow by 7.3percent in 2014.

Invesco Perpetual head of Asian equities Stuart Parks identifies a critical question for China as whether it can successfully move away from its reliance on credit-fuelled investment towards a more consumption-based growth model notes Richard Cayne Meyer in Bangkok Thailand.

“Last November’s announcement of an ambitious new reform agenda gave us grounds for optimism – particularly initiatives focused on allowing market forces a more ‘decisive’ role in the allocation of resources, improving capital allocation and shifting income towards households,” he says.

“The Party leadership appeared to go out of its way to explain why wide-ranging reform is needed and we believe there is real potential for meaningful change in the medium term. The critical question is whether the authorities are prepared to let growth drop below their 7.5percent growth target as they try and implement reforms. My chief concern is that they are not prepared to make this potentially painful adjustment, preferring instead to try and smooth the transition.”

Parks adds that markets are unlikely to react positively until China starts to make solid progress in this reform agenda, which includes measures to allow the market to play a bigger role in the economy and permit the private sector to compete freely with state-owned enterprises.

“Until we see evidence of reforms, scepticism over China’s resolve to rebalance its economy and ability to control credit growth will remain a headwind for markets in the region. However, China has proven in the past that it can change quickly when challenged and there have been encouraging developments in other economies across the region,” he says.

Richard Cayne Meyer agrees with the opinion “In our view, now is not the time to despair about China and the region in general as we believe that very little hope is being reflected in market valuations. Earnings growth expectations of 10percent for the region in 2014 look achievable to us and we are still able to find what we consider to be good-quality companies at attractive valuations.”

Richard Cayne Meyer born in Montreal, Quebec Canada resides in Bangkok Thailand and runs the Meyer Group of Companies  Prior to which he was residing in Tokyo Japan for over 15 years and is currently CEO of Asia Wealth Group Holdings Ltd a London, UK Stock Exchange listed Financial Holdings Company.  Richard Cayne has been involved in the wealth management space in Tokyo Japan and has assisted many High Net worth Japanese families create innovative international tax and wealth management planning solutions. Wealth Group.