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Growth Opportunities

 

Investment Landscape

 

As one of the largest and fastest growing economies in the world, China is able to offer a distinct source of potential investment growth. China is now the second largest economy in the world with GDP growth that has averaged 11.64% annually since 1978.1 China also maintains the third largest equity market2 and third largest bond market in the world.3

China creates a unique opportunity for global investors. Only recently has China welcomed foreign investors to share in its decades-long history of progress, offering a conservative and long-term avenue of growth.

Since 2013, the QFII and RQFII systems have been continuously reformed, and the interconnection mechanism of Shenzhen-Hong Kong Stock Connect, Shanghai-Hong Kong Stock Connect and Shanghai-London Connect has been deepened. Together with the inclusion of A-shares in MSCI in 2017, the opening of China’s capital market is further advanced and the internationalization of the RMB continues. IMF included the RMB in the SDR, which indicates that the matching demand for RMB assets will also increase in the future. At present, overseas institutions and individuals hold A stock market value of 1.28 trillion, accounting for 7% of the free market value of A shares; holding bonds of 1.75 trillion 4.

Opportunity

From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. Measured on purchasing power parity (PPP) basis that adjusts for price differences, in 2017, China stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world’s largest exporter in 2010 and the largest trading nation in 2013. Still, China’s per capita income is below the world average5.Chinese equities have a 14% correlation with the U.S. stock market7, offering global investors powerful avenues of diversification they previously have been unable to access.

 

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Wind , as of 2018-12-31

 

1 Source: National Bureau of Statistics of China,2017

2 Source:Wind,3th December 2018

3 Source:Wind,3th December 2018

4 Source:People’s Bank of China,September 2018

5 Source: CIA World Factbook, 2017

6 Source: Wind, 2018

7 Source: Wind, October 2018