The predicted slowdown in China must be kept in perspective

Amid all the recent doom and gloom, major global banks are quietly alerting their clients to prepare for a share market surge, if Greece exits the eurozone.

That's because they believe world authorities will be flooding international markets with massive liquidity.

And given the G8 Communique from Camp David, this may well occur anyway — just to keep Greece within the fold.

Last week, Ken Henry (former treasury secretary) predicted Australia could provide global appeal to investors:

“It's quite possible on this occasion Australia will be seen as offering something of a safe haven for global capital movements.”

And this is already being evidenced by strong demand for Australian bonds — where the yields for 10-year bonds fell to a new post-war low of less than 3.2%, during last week.

But there's some hesitancy.

There still seems to be a general confusion within the economy. And unfortunately, when people are confused, they tend to do nothing. Therein lies the current dilemma for Australia.

Even though our fundamentals are in vastly better shape than 80% of the rest of the world, most consumers are "feeling less wealthy" than they were several years ago.

This is mainly due to house prices having fallen and remained stagnant, as well as the volatility within the share market. Plus there are number of structural changes working their way through the economy.

But overall, employment levels are holding up, and in some areas, business investment is expected to increase by more than 20% this year.

Furthermore, imports should grow by 12% and the terms of trade are expected to improve by about 10% over the coming 12 months. Even Japan has notched up a 4.1% growth for the first quarter, and the US housing market looks as though it may have bottomed.

The latest OECD forecast has Australia growing at 3.1% in 2012 and reaching 3.7% during next year.

Still, pundits are a fearing a slowdown in China, but you really need to keep this in perspective:

• China's growth has fallen from 9% to 8.1% — which is still remarkably high;
• Its economic growth is driven by domestic investment, not exports to Europe; and
• Resource-heavy investment into new roads, bridges, airports, officers and apartment blocks is still growing by over 20% per annum.

This is what will continue to underpin China's demand for Australian resources.

Bottom line: Taken together, all of this is clearly creating havoc for the forecasters. However, it certainly doesn't justify the level of caution being shown by commercial property investors at present.

Right now, if you do your homework in finding a modern property with a solid tenant on a four- to six-year lease,  you'll be able to snare a well-priced commercial property investment, offering you excellent growth over the next five years.

Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, his-best.biz, which he updates regularly about the best way to get the most out of your commercial property investment.