Imbalances in China's economy do not indicate the onset of a crisis, says a wealth manager.

The level of uncertainty surrounding the world's second largest economy is worryingly high, according to Signia Wealth.

Continued jitters following last month's equity tumble in China have prompted some investors to de-risk. New York-headquartered Emerging Global Advisors recently launched an exchange-traded fund providing exposure to emerging markets excluding China and Hong Kong, while Carmignac, the investment house, reduced its equity exposure.

“China is slowly doing what everyone is expecting it to do. It should be viewed as a good thing. What worries me more is the fact that this simple announcement and small movement in currency has created so much uncertainty in the market and that for me is linked to the Fed and the uncertainty as to whether they are going to hike rates [this] week or not. The market seems to think not,” said Signia Wealth's chief investment officer, Etienne de Merlis.

Emerging market outflows totalled $2.1 billion in August while the MSCI Emerging Markets Index registered a loss of 21 per cent. Signia Wealth is one of several wealth managers, including ABN AMRO Private Banking and Brown Advisory, who have recently urged investors to look through the smog of short-term volatility. 

“A lot of people are concerned that China is masking a deeper problem, but even if Chinese GDP was to grow closer to 5 or 6 per cent rather than the expected 7 per cent, it isn’t a crisis. There are imbalances in the country, but it does not mean that a crisis is imminent. At this stage banking problems appear to be contained and the country is not relying on external finances, so if there is a crisis it should be contained,” de Merlis said.