DUBAI - Emirates NBD, the Middle East's largest banking group, prefers to invest in Chinese equities when it comes to investment in the emerging markets, according to a senior manager of the bank.

"The case for Chinese equities has strengthened with better than expected inflation news," Gary Dugan, Chief Investment Officer Private Banking at Dubai-based Emirates NBD said in his weekly economic commentary, "as Chinese inflation continues to fall, with the February figure being just 3.2 percent year-on-year."

The emerging market economies often refer to the BRIC bloc, which comprises Brazil, Russia, China and India.

The Chinese bellwether gauge Shanghai Stock Exchange Composite Index gained 11.6 percent year-to-date, but has been trading sideways in a narrow range since the end of February.

Dugan added the drop in inflation allows the Chinese central bank to ease monetary policy in the coming months. He praised Beijing for the steps it took to sustain economic growth. "The government is also minded to cutting taxes and increase spending to stimulate demand in the Chinese economy."

Chinese Premier Wen Jiabao said his government targets a GDP growth target rate of 7.5 percent in 2012, in line with the strategy to secure the Chinese economy's "soft landing."