The looming US fiscal cliff was no Thelma-and-Louise moment for the world economy, according to a leading global fund manager visiting Australia.

John Vail, head of global strategy at Nikko AM – the parent firm for fund manager Tyndall – is in Australia to spread his message to clients that while there are “growth headwinds,” Australia in particular is well positioned for growth.

Referring to the “fiscal cliff” – the imminent predicted reduction in US spending and tax cuts – Vail said that in the event of either a Democrat or Republican presidential victory, the impact will be limited.

“We think that the worst impacts of that are going to be avoided,” he told I&T News in a telephone interview. “We see some headwinds, but no Thelma-and-Louise moment when they plunged their car off the cliff into the abyss.”

Vail’s other message is that while Chinese growth might slow to around 7.5 per cent, that growth is more sustainable than the double digit growth out of China in recent years.

“Chinese growth, going forward, will not be as spectacular but it will still be dominant if you measure the actual contribution to growth from China to the rest of the world,” Vail said.

“It will be more sustainable growth. We’ve been saying for quite some time that growth in the 9-per-cent range is unsustainable and it should slow down to around 7.5 per cent, and that is the best thing for China and the world.”

Vail said he believed Australian and Hong Kong equities represented the best investment opportunities on the global landscape.

While commodity prices may have peaked, it was “pure hysteria” for sections of the Australian media to claim that the country’s resources boom was over.

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