The new leadership of the Communist Party of China was decided and the concentration of power in Secretary General Xi Jinping (President) became clear. Whether a Chinese asset portfolio aligns with Xi’s focus is more important than ever to investors.
Mr. Xi, who has decided to enter the third term as general secretary, has consolidated the top leadership with his collaborators. After Mr. Xi announced the party’s Politburo Standing Committee Thursday, speculations emerged that his policies of tightening control over the economy and markets would continue for years without any backlash.
Xi’s leadership of the Communist Party of China begins an unusual third term
Hong Yi, chief economist of the Glow Investment Group, speaks
Source: Bloomberg
The Hang Seng China Enterprises (H Shares) Index, which consists of mainland China equities, fell 7.3% on the Hong Kong stock market on the 24th, the highest since 2008. The offshore yuan is trading for the first time. time after 10 years of trading1 dollar = 7.3 yuanfell to.
Hong Kong’s Chinese financial markets are posting sales sales
It is becoming clear that investors don’t mean much to Mr. Xi, unlike in countries like the United States and the United Kingdom, where dramatic market reactions require political changes or lead to regime change.
Beijing’s unexplained delay in releasing many economic data, including gross domestic product (GDP), further strengthens this view and risks further alienating already uneasy asset managers for Chinese assets.
Mainland China Shares, Overseas Sales total 368 billion yen, highest ever – 24th stock connection
spot price of the offshore renminbi
Source: Bloomberg
Grow Investment Group chief economist Hong Lian said “common wealth” aims to narrow the gap between rich and poor and “promote economic development both nationally and internationally.”double turnInvestors must decide whether Xi’s political goals are acceptable. He told Bloomberg Television on Tuesday that he will need to consider whether “these new sets of values” are in line with his investment goals in the coming years.
July-September (third quarter) announced by the National Bureau of Statistics of China on 24GDP growth rateit has exceeded expectations, but sentiment around the Chinese market is still soured. “The market is clearly concerned about the political manipulation and direction of how the data is presented,” said Brian Quartarolo, who trades Asian bonds and currencies at hedge fund Lighthouse Investment Partners.
GDP statistics should have been published on the 18th during the party congress, but have been abruptly postponed.
China postpones July-September GDP data release, no new plans announced
Source: Bloomberg
Investors who hoped that Mr. Xi would break with conventions and lead China for more than a decade would usher in a more favorable investment climate are facing a harsh reality.
“The market is concerned that so many of Xi’s closest associates and subordinates have been elected to leadership that they will adopt policies that are not market-friendly,” said Bunny Lam, head of research at CEB International Investments. “It strengthens Xi’s ability to make decisions without hindrance,” she said.
Original title:The collapse of the Chinese market has become a high-risk bet on Xi Jinping(extract)
