Casting a “vote of confidence”, foreign investment institutions are optimistic about “Chinese assets”

Casting a “vote of confidence”, foreign investment institutions are optimistic about “Chinese assets”

The recently released national economic performance data and financial data have released positive signals of continued economic recovery. At the same time, the International Monetary Fund (IMF) has raised its forecast for China’s economic growth in 2023, and foreign financial institutions such as Goldman Sachs, Deutsche Bank, UBS, and Wellington Investments have also cast a “vote of confidence” in China’s economic prospects and RMB assets. “. Looking to the future, as various domestic policy measures to stabilize the economy continue to take effect, RMB assets will become more attractive.

Recently, the IMF raised China’s 2023 GDP growth forecast to 5.4% from the previous 5%, and also raised its 2024 GDP growth forecast. In addition, national economic operation data and financial data continued to improve in October: the added value of industrial enterprises above designated size in October increased by 4.6% year-on-year, 0.1 percentage points faster than the previous month; total retail sales of consumer goods increased by 7.6% year-on-year, 2.1 percentage points faster than the previous month ; The import and export of goods turned from a decrease to an increase year-on-year; the increase in social financing in October was 1.85 trillion yuan, 910.8 billion yuan more than the same period last year…

Recently, many foreign financial institutions have also cast a “vote of confidence” in the Chinese economy. Deutsche Bank maintains its optimistic outlook on China’s economic prospects, predicting that China’s GDP growth in the fourth quarter will exceed 5%, and the full-year growth rate is expected to be 5.2%.

Goldman Sachs also further raised its GDP growth forecast for China in 2024. Goldman Sachs chief China economist Shine Hui said in an interview with the media that this expectation is mainly based on the following factors, including stable consumption prospects, central fiscal support, including real estate, Investment in infrastructure and manufacturing, as well as the global economy’s external demand and exports, will have a positive impact.

In addition, many foreign investment institutions are also optimistic about the potential that will be unleashed by the continuous transformation and upgrading of China’s economic structure. UBS’s “China Economic Outlook 2024-2025” report believes that investments related to green transformation may maintain strong momentum.

Pu Jiangning, senior managing director of Wellington Investment Management and investment director of Asia, said in a public speech recently that China has been actively changing the driving force of its economic growth model from quantity to quality over the past few decades, such as from credit , real estate and infrastructure to the service industry, high-end manufacturing and technological innovation. “In certain important global industries, China has strategically sown the seeds for future long-term economic growth.” He said.

While optimistic about China’s economic prospects, many foreign financial institutions have also expressed their optimism about the investment prospects in China’s financial and capital markets, and the attractiveness of “Chinese assets” is also increasing.

Ma Liqin, head of research at Deutsche Bank Asia Pacific, recently published a China stock market strategy research report stating that China has established a world-leading capital market investment system. At the same time, the growth rate of China’s economy is still much higher than that of other major economies in the world, and there will be more growth in the future. Room for further growth, even in the face of an economic slowdown, can bring benefits to equity investors, so investing in Chinese stocks at current low valuations may be a good investment opportunity.

Liu Jinjin, chief China equity strategist at Goldman Sachs, said that in the Asia-Pacific region, Goldman Sachs has five overweight markets, including China A shares. He predicts that the net inflow of northward capital from A-shares in 2024 may be roughly maintained at a level similar to this year, about US$15 billion.

The latest data released by the State Administration of Foreign Exchange shows that my country’s cross-border capital flows became more balanced in October. Among them, in capital project transactions, foreign investment scale further increased in October after a net increase in domestic bond holdings in September.

Looking forward to the future, industry insiders believe that as various economic stabilization policies and measures continue to exert their effects and promote the continued recovery of economic operations, the long-term investment value of RMB assets will become more prominent.

“The depth, breadth and resilience of China’s economy and the conscientiousness and perseverance of Chinese enterprises are the main forces attracting capital from around the world to invest in China. The Chinese economy is the biggest anchor of stability amid the current uncertainty of the world economy.” Standard Chartered Bank (China) Chairman, President and Vice Chairman Zhang Xiaolei said in an interview with reporters during the 6th China International Import Expo recently.

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