This article first appeared in The Edge Financial Daily, on March 16, 2016.

KUALA LUMPUR: Despite the slowdown in China, the world’s second-largest economy remains an enormous growth story, says Templeton Emerging Markets Group executive chairman Mark Mobius.

“China’s growth is decelerating, but compared with the US, China still has an enormous growth story,” Mobius said in a speech at the Global Emerging Markets Programme yesterday.

China posted a growth rate of 6.9% in 2015, the weakest pace in 25 years.

The slowdown in China also sparks concerns that it will have an impact on other economies, putting further pressure on declining commodities prices.

Mobius however thinks that some of the fears regarding China’s sluggish economy are exaggerated.

He said although the growth rate in 2014 was 7%, compared with 10% growth in 2010, the amount of increase in US dollar terms was much more in 2014 compared with 2010.

“The size of the economy is growing rapidly. Its foreign reserves are very high at about US$3.3 trillion (RM13.63 trillion), the largest in the world,” he explained.

Mobius noted that the slower pace in growth was due to the transition of the economy as China is changing from a manufacturing-based economy to a service-based economy.

This may have caused some correction in the commodities prices and affected commodity-based economies such as Brazil and Australia, but Mobius said the raw material prices will recover when the supply decelerates.

He added that imports of raw materials into China may decline, but the economy will not stop importing.

Meanwhile, Mobius said the urbanisation in China will be supporting the property market as the urban population in China is still low compared with the United States.

The urban population in China was about 54% in 2014, compared with 81% in the US, according to the World Bank.

“Property prices have come down, but in the long-term trend, it is trending upwards,” he noted, adding that property sales are expected to continue rising as people move to the cities and move from substandard housing.

Mobius also foresaw growth in China’s infrastructure as the demand for trains and subways remains due to traffic jams. He noted that almost every city is building huge train stations to meet the demand.