As the celebrations continue to mark the start of the Chinese Year of the Dragon - traditionally seen as the most powerful but changeable signs of the Chinese zodiac - there is debate about whether growth in the Chinese market will be reignited this year. Philip Ehrmann, manager of the Jupiter China Fund, believes that there are sound reasons for optimism: "I believe that this could be a rewarding year for investors, as long as the Chinese authorities face the challenges of the year ahead, and manage to engineer a 'soft landing' for the economy." he said.

Philip continued: "Following a particularly challenging period last year against a backdrop of weakening global demand and Eurozone problems, we believe that Chinese equities will perform significantly better this year. Inflation seems to be under control and we think it will continue to decelerate on the back of slower property construction and weakening export growth, enabling the central bank to ease its policy further. International trade activity, while reduced, remains reasonably strong as the US and markets outside Europe remain resolute. We expect China to achieve economic growth of 8% in 2012, with GDP likely to moderate in the first half before starting to pick up in the middle of the year.

"Also, the banking system is in good shape. We would not be surprised to hear about Chinese banks stepping in to fill the gaps in international trade finance as the European banks retrench. This suggests the banks are well capitalised and that the Government is prepared to backstop any short term funding that is needed by its banks.

"In addition to this supportive macroeconomic framework, valuations of Chinese equities remain attractive to long term investors. They are currently close to the lows of the credit crunch and the dramatic dip during the SARS epidemic of 2003, but we believe our companies are in far better shape. Any sign of improving liquidity and/or reform measures should kick off a rally in the market and drive positive sentiment amongst investors.

"Finally, stimulus and reform measures are being announced across a range of industries. Income tax thresholds have been raised, measures to boost consumption are being readied, and the new head of the CSRC (securities commission) is seeking to encourage investment by institutions.  With property curbs in place to rein in the perceived bubble that has most concerned foreign investors, the stock market is likely to be the preferred  avenue for China's high net worth investors, particularly with very low deposit rates at the banks.

"With regards to my portfolio, I see opportunities in companies operating in areas termed by the government in their recently announced 12th Five Year Plan as the 'Emerging Strategic Industries'.  These relate to 7 key economic sectors that will be at the centre of delivering sustainable growth across the economy for many years to come.  They include companies at the forefront in delivering energy savings and environmental services such as China Everbright International; companies providing process control equipment and software for the country's rapidly evolving industries such as Hollysys Automation Technologies; and companies at the forefront of the growing digital economy such as Tencent, which touches every area of the commercial activity."

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Jupiter Unit Trust Managers Limited (JUTM) and Jupiter Asset Management (JAM) are both authorised and regulated by the Financial Services Authority and their registered address is Grosvenor Place, London SW1X 7JJ. They are both subsidiaries of Jupiter Investment Management Group Limited and the group is collectively known as "Jupiter. The above commentary represents the views of the Fund Manager at the time of preparation and may be subject to change and this is particularly likely during periods of rapidly changing market circumstances. Their views are not necessarily those of Jupiter and should not be interpreted as investment advice. Every effort is made to ensure the accuracy of any information provided but no assurances or warranties are given.