Xinhua News Agency, Shenzhen, June 2nd Question: China market and RMB assets have long-term attraction — — China assets in the eyes of foreign-funded institutions
Xinhua News Agency reporters Yao Junfang, Wei Weihua and Zhou Ganxian
According to the information of the CSRC, since the beginning of this year, foreign capital has kept flowing into A shares, with a net inflow of 170 billion yuan from January to May through the Shanghai and Shenzhen Stock Exchanges. In the eyes of foreign institutions, why do China market and RMB assets have long-term attraction? On June 1-2, at the 2023 Global Investor Conference held by Shenzhen Stock Exchange, many foreign-funded institutions launched a heated discussion on this.
For many foreign-funded institutions, optimistic about RMB assets is mainly based on China’s economic fundamentals and growth potential. "China’s economy is an important engine of economic growth in the Asia-Pacific region. China has a wide range of investment opportunities, which is the consensus of overseas investors. We have seen growth potential in many fields. " Pan Xinjiang, CEO of Jing Shun Group Greater China, Southeast Asia and South Korea, said.
Tess Ayton, CEO of Huiying Investment Asia, said: "We make asset allocation decisions based on long-term development trends and fundamentals. The Asia-Pacific region is a market we attach great importance to. "
The Report on Asian Economic Integration in 2023 recently released by the Asian Development Bank shows that the economic recovery in the Asia-Pacific region is largely due to China, and China contributes 64.2% to the regional economic growth.
In recent years, the trend of high-quality development of listed companies in China is obvious. The data shows that in 2022, A-share listed companies realized a total operating income of 71.53 trillion yuan, up 7.2% year-on-year, and the overall average R&D intensity was 2.32%, up 0.25 percentage points year-on-year. There are more than 2,500 listed companies in strategic emerging industries.
Pu Jiangning, senior managing director of Wellington Investment Management Company, revealed that in the past few years, the company’s investment in China has been expanding, and the weight of China’s investment in the portfolio has increased. "Recently, we visited some companies in the tourism and pharmaceutical industries. I think these companies have done very well in globalization and innovation, showing great vitality."
The trend of green development of A-share listed companies is also more obvious. Statistics show that more than 1,700 listed companies independently compiled and published ESG (Environment, Society and Corporate Governance) related reports in 2022, and the number of listed companies increased significantly year-on-year.
Ye Jiasheng, head of Asia-Pacific strategic index of S&P Dow Jones Index, said that there is a very high degree of attention to ESG overseas at present. "In an environment where China’s capital market is becoming more and more open, the inclusion of ESG framework can better integrate with the international community and be more easily favored by overseas ESG investors."
In recent years, the regulatory authorities have made great efforts to expand the high-level institutional opening of the capital market, and successively launched a series of new measures of two-way opening, which greatly facilitated the participation of foreign-funded institutions in China’s capital market.
Liu Zehua, director of China channel and strategy development stock products department of HSBC, said that in recent years, we have seen the steady upgrading of QFII/RQFII (Qualified Foreign Institutional Investor/RMB Qualified Foreign Institutional Investor) system and the further expansion of stock connect and bond connect programs, which have had a positive impact on foreign investors.
According to the data of Shenzhen Stock Exchange, since the beginning of this year, the transaction amount of QFII, RQFII and Shenzhen Stock Connect investors has accounted for about 9.5%, which is 3.4 times that of five years ago. More and more international investors have participated in investing in the Shenzhen Stock Exchange market.
In April this year, with the listing of the first batch of enterprises in the main board registration system of Shanghai and Shenzhen Stock Exchanges, the reform of China’s stock issuance registration system has been fully implemented.
Zhao Junjie, CEO of Swiss Patek Asset Management Asia (excluding Japan), said that China’s capital market has grown into the second largest market in the world, which is very important for global investors. "The implementation of the registration system can effectively help growth companies acquire capital and grow stronger. At the same time, it has further promoted the opening of China’s capital market and enhanced the confidence of global investors. "
Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said on the 1st that with the implementation of the registration system reform, the number of A-share listed companies has increased significantly, with the total number exceeding 5,000 and the total market value exceeding 85 trillion yuan. "Markets such as bonds, funds, REITs, indexes, futures and derivatives have developed steadily and rapidly, providing one-stop and diversified investment options for global investors."
A number of foreign-funded institutions said that with the deepening of the reform and opening up of China’s capital market, the depth and breadth of the market will continue to expand, and the convenience of investment and financing will be further improved, which will help foreign investors to better participate in China’s capital market and share the development dividend.