Shanghai

MARK Mobius is convinced that China's push into technology, consumer and service industries will produce a more sustainable expansion in the world's second-largest economy. He's just not so sure it's going to work out for equity investors.

The chairman of Franklin Templeton's emerging-markets group predicts China's "new economy" sectors will drive growth as the nation weans itself from a reliance on credit-fuelled investment. The problem, Mr Mobius says, is that many stock valuations already reflect a successful transition. The ChiNext index - used by local traders as a proxy for new economy companies - is three times more expensive than the benchmark Shanghai Composite Index after surging 25 per cent in the past month.