[Those things in China]Foreign media: optimistic about China’s economy, global trillions of funds snap up Chinese assets
China Daily News, December 14thIn 2020, after China’s economy has undergone severe tests, it will emerge a curve that first declines and then rises. Foreign media believe that 2020 will be the year when China’s capital market has fully exploded. A large number of foreign capital floods into the Chinese market. Asset classes such as stocks and bonds are favored by foreign funds. The sustained recovery of China’s economy is due to the increased attractiveness of its capital market. The main reason.
According to a report from the Financial Times on December 13, in 2020, foreign investors snapped up Chinese stocks and bonds worth more than 1 trillion yuan. In dollar terms, China’s Shanghai and Shenzhen 300 Index has risen by about 27% this year, more than 13 percentage points higher than the S&P 500 Index. The Growth Enterprise Market, which is dominated by technology stocks, rose about 59% over the same period, surpassing the soaring US technology stock market-the Nasdaq Composite Index. Chinese bonds have also attracted new investors with their rare yields.
Kenneth Argentway, head of Asian sovereign debt at Aberdeen Standard Investments, said that this year has taught investors who are unwilling to allocate the Chinese market a painful lesson. “For any emerging market investor who has reduced (Chinese) capital, this is a very painful deal.”
The article said that during the epidemic, China’s bond market was extremely attractive to investors, thanks to China’s continuously open financial system and China’s decisive measures to deal with the new crown epidemic.
Facts have proved that China’s strict anti-epidemic measures have ensured the economic recovery in the later period, and will be close to full capacity in the second half of 2020.
Paul Colwell, head of Willis Towers Watson’s Asian portfolio department, said: “China has gone further on the road to recovery after the epidemic.”
The article stated that as China’s economic growth has returned to pre-epidemic levels, domestic consumption has begun to pick up. With other countries cutting interest rates vigorously or launching bond purchase plans, and pushing yields close to zero, the People’s Bank of China has been able to maintain the benchmark interest rate almost unchanged. change.
This means that China has become the only option for debt investors to seek returns.
Deutsche Bank macro strategist Samir Goel said that the inclusion of Chinese onshore bonds in the FTSE Russell Index will boost this momentum again next year.
The article stated that despite the ongoing tensions between the United States and China, the inflow of funds into China has been growing rapidly during Trump’s presidency. During his four years in office, the inflow of funds to China totaled more than $620 billion.
Hayden Briscoe, head of fixed income for the Asia-Pacific region of UBS Asset Management, said the flow of global funds into China “will accelerate.” “Our dialogue with customers is increasing. Many people are beginning to allocate Chinese assets for the first time.”
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