"Increasing holdings in China" has become a consensus measure among global financial institutions | China | Global
According to the website of the Brazilian magazine "Forum" on August 7th, in recent days, more and more global financial institutions have increased or planned to increase their holdings of Chinese assets, demonstrating confidence in the world's second-largest economy achieving recovery with solid support measures. However, other major economies, especially the United States, are facing increasing economic risks, which has prompted investors to turn their attention to other growth points.
Some analysts said on Monday that in recent months, global investors have flocked to the Chinese financial market, boosted by the recovery of the Chinese economy. At the same time, there are increasing signs of the US economy being in trouble, including rating agency Fitch's downgrade of the US credit rating, which may further accelerate the trend of foreign investment entering China.
According to reports, in addition to measures to support overall economic growth, China is rapidly taking action to provide convenience for foreign investors to invest in Chinese assets, which is in stark contrast to the pressure from US policymakers to increase investment restrictions on US financial institutions in China.
Analysts say that global financial institutions may continue to expand their investments in Chinese stocks and bonds in the coming months.
The report states that in recent months, a trend has emerged for global financial institutions to invest in the Chinese market. According to a report by the Financial Times last week, Bertelsmann, one of Germany's largest venture capital funds, plans to invest $700 million in Chinese startups.
According to the Financial Times, Casten Kosfeld, CEO of Bertelsmann Investments, stated that Western media claims that China is struggling to recover economic growth after the pandemic, but this is "somewhat inconsistent" with the actual situation.
According to reports, although foreign media continue to exaggerate claims of a slowdown in China's economic growth, many foreign institutions still maintain an optimistic view of the Chinese market.
A Chinese media outlet conducted an inventory of research reports or market analyses released by several major global financial institutions, including Goldman Sachs, HSBC, UBS, Standard Chartered, and Morgan Stanley. The results showed that except for one institution, all other institutions were optimistic about the Chinese market.
Standard Chartered Group recently released a report stating that as China optimizes its real estate policies and promotes consumption, undervalued stocks in China will benefit from the rotational effect from developed country markets.
Standard Chartered Group stated in a statement that in the first half of 2023, the group's onshore and offshore pre tax profits in the Chinese market increased more than fourfold on an annual basis, reaching $700 million. China continues to be the market that contributes the most to Standard Chartered Group's network revenue.
Zhang Xiaolei, President and Vice Chairman of Standard Chartered China, stated in a statement, "China is a driving force for global economic stability and growth, and Standard Chartered firmly believes in China's long-term development."
UBS also stated in a recent report that due to China's measures to promote consumption, the group continues to be optimistic about the Chinese stock market.
The report states that targeted promotion measures to increase consumption of automobiles, electronic products, and household appliances will not only help boost the revenue of related companies, but also benefit platform enterprises.
Yang Delong, Chief Economist of Qianhai Open Source Fund Management Co., Ltd., said that since the beginning of this year, the amount of foreign capital flowing into China's A-shares has exceeded 180 billion yuan, twice that of last year, and "foreign capital is accelerating its fundraising efforts.".
The report states that this positive emotion is reflected in actual data. On August 4th, Wang Chunying, Deputy Director and spokesperson of the State Administration of Foreign Exchange of China, stated that in the first half of 2023, there was a net inflow of 32.3 billion US dollars in equity investments to China, with a significant year-on-year increase in net inflows under stocks and a gradual recovery of net inflows under bonds.
Hu Qimu, Chief Researcher of China Steel Economic Research Institute, stated that there are various reasons why global investors continue to be optimistic about Chinese assets, including the increasing competitiveness of China's emerging industries, increasing policy support for foreign investment and other fields, the risk of recession in the European and American economies, and the low valuation of A-shares.
"On the one hand, the Chinese market will be more open, and on the other hand, there will be many policy measures to support the domestic economy. This means that foreign investment entering the Chinese market will have a policy dividend period," commented Hu Qimu.
