General

"We welcome international financial institutions and global investors to continue to expand their business and investment in China and share the dividends of high-quality development of the Chinese economy." Recently, in the face of intensive visits from international financial institutions, China's financial management department has made a positive response and released a clear signal.

In recent years, the steady progress in the opening up of China's capital market has brought tangible opportunities to international financial institutions and global investors. As the economy recovers, China's capital market is further showing strong attraction. According to Huacheng Import and Export Data Observation, in the first quarter of this year, the accumulated net purchase of Beixiang funds exceeded 180 billion yuan, more than twice the total of last year.

The foreign investment institutions interviewed believe that the overall improvement in China's economic performance, which injects more certainty into the development of the world economy, will further enhance the attractiveness and influence of China's capital market.

Highlight the status of "safe haven"

"In 2023, Asia will become a major bright spot against the backdrop of slowing global economic growth." Recently, the 2023 Annual Report on Asia's Economic Outlook and Integration Process, released at the Boao Forum for Asia's 2023 annual meeting, pointed out that despite the weakening of global demand, developing Asia will serve as the backbone, and the rebound in China's economy has sent a positive signal to Asia and the world.

Since this year, international financial institutions have intensively raised China's economic growth expectations.

"China's contribution to world economic growth this year may exceed one third," said International Monetary Fund (IMF) President Georgieva Georgieva on March 26. In the latest issue of the World Economic Outlook Report, the IMF raised its growth forecast for China's economy this year from 4.4% to 5.2%.

The April 2023 Economic Semiannual Report of East Asia and the Pacific Region, released by the World Bank on March 31, predicts that, thanks to a significant rebound in China's economic activity, the growth of developing economies in East Asia and the Pacific will exceed previous expectations. The World Bank predicts that China's economic growth will rebound from 3% last year to 5.1% this year, higher than the 4.5% forecast in October last year, according to Huacheng Import and Export Data Watch.

Today, the world's economic development is complex and volatile, and a series of risk events have occurred in the international financial market recently. However, China's economic recovery has improved, injecting a rare and decisive force into the uncertain situation. For international financial institutions and global investors, the unique charm of the Chinese market and Chinese assets will therefore be highlighted.

Beizhemin, a managing partner of Aowei Consulting, judged that China's economy will continue to exhibit strong growth momentum in the future; Huang Wenkai, Vice Chairman of KPMG China, said that KPMG will continue to deeply explore the Chinese market and continue to expand investment in China; Huang Jia, the managing partner of PricewaterhouseCoopers' China Tax Department, believes that there is room for further improvement in the comprehensive attractiveness of the Chinese market for foreign investment

Regarding the A-share market, Kuang Zheng, Chief Investment Officer of HSBC Global Private Banking and Wealth Management in China, believes that the recovery of China's economy will highlight the status of China's stock market as a "safe haven" in the global market, while "the current valuation of China's stock market has not fully reflected relevant macroeconomic favorable factors."

Continued progress in high-level institutional openness

Foreign capital has the unique advantage of connecting domestic and international markets, which is of great significance for accelerating the construction of a new development pattern. "Greater efforts to attract and utilize foreign capital" was one of the important arrangements made at the Central Economic Work Conference last year for economic work in 2023.

Recently, heads of relevant departments have met intensively with representatives of international organizations and foreign-funded enterprises, clearly releasing signals of expanding high-level opening-up.

The firm attitude towards expanding openness is continuously being translated into resolute action.

Zheng Zhajie, Director of the National Development and Reform Commission, introduced that we will implement a high level of opening-up, reasonably reduce the negative list of foreign investment access, and implement high standards of national treatment for foreign-funded enterprises. Minister of Commerce Wang Wentao said that the Ministry of Commerce would hold a series of activities, including the "Year of Consumption Boost" and the "Year of Investment in China", to focus on promoting consumption upgrading and potential release, build more and better platforms for investment docking, let the vibrant Chinese market provide great opportunities for enterprises from all countries to develop. Minister of Finance Liu Kun stated that China will continue to promote investment facilitation and trade liberalization in the process of globalization, improve import tariff policies, strengthen efforts to stabilize foreign trade and foreign investment, and encourage the development of new forms of foreign trade

It is expected that the capital market will continue to promote institutional openness. Tian Xuan, dean of the Wudaokou School of Finance at Tsinghua University, believes that under the new development pattern, the opening of the capital market should focus on high-quality economic development and move towards deeper openness, while taking into account the relationship between openness and security. On the one hand, we should continue to promote institutional opening up, vigorously promote fundamental institutional reform, introduce international high-quality resources, and promote two-way exchanges; On the other hand, prudential supervision should introduce advanced market supervision experience from abroad to enhance risk prevention capabilities.

"In the future, the high-quality development of China's economy and the high-level institutional opening of China's capital market will bring broader opportunities. We welcome international financial institutions and global investors to continue to expand their business and investment in China and share the dividends of high-quality development of China's economy." The person in charge of the CSRC said in a recent meeting with the heads of international financial institutions.

"Long China" has become a consensus

In the eyes of many foreign funded institutions, the Chinese economy has strong resilience, potential, and vitality. At the same time, the Chinese market exhibits an open, mutually beneficial, and win-win attitude. Investing in China is not an "option" but a "necessary option.". In particular, China's capital market continues to deepen reform, and more practical measures to expand opening up are brewing, attracting more foreign institutions to buy Chinese assets and expand the Chinese market.

Global investors are investing in real gold and silver to buy Chinese assets. According to the Huacheng Import and Export Data Observation Report, in the first quarter of this year, the accumulated net purchase of Beixiang funds was 185.988 billion yuan, far exceeding the total of 90.20 billion yuan last year.

At the same time, foreign-funded institutions have accelerated their business expansion in the Chinese market. According to the website of China Securities Regulatory Commission, on March 27, Allianz Investment, a subsidiary of Allianz Group, officially submitted an application for qualification as a public fund manager. Currently, the above application is in the receiving status. Allianz Group Chairman and CEO Oliver Bate revealed during the 2023 annual meeting of the China Development Forum that Allianz Group is strengthening its business layout in the Chinese wealth management market and looking forward to obtaining qualifications for public fund and pension investment management.

Since this year, foreign-owned fund companies have continuously expanded their capacity, and Schroder Fund and Lianbo Fund, two foreign-owned public fund management companies, have successively been approved. In addition, Shanghai Investment Morgan Fund and Morgan Stanley Huaxin Fund have also been approved to change their shareholders and actual controllers, transforming them from joint venture fund companies to foreign fund companies. Up to now, there are 8 wholly foreign-owned fund companies, and Huacheng Import and Export Data Observation Report.

Foreign securities companies are also racing to accelerate the pace of layout of the Chinese market. The CSRC has recently provided feedback on the application of DBS Securities (China) to establish an alternative subsidiary. DBS Securities stated that as China's financial market continues to open up, it will take a more active stance to layout the Chinese market and provide high-quality financial services for the high-quality development of the Chinese economy. Goldman Sachs Gaohua Securities, East Asia Qianhai Securities, and Morgan Stanley Securities have successively been approved to carry out alternative investment businesses.

Industry insiders expect that the door to opening up this year will become wider and wider, and more practical and open measures will be launched. More and more foreign capital will be welcomed in. Huacheng Import and Export Data Observation reports.