Financial institutions

Financial institutions still confident in the Chinese market

BEIJING: Despite the Covid-19 outbreaks and mounting downward pressure on the economy, several global financial institutions have expanded their presence or plan to do so in the Chinese market, showing continued confidence in the world’s second-largest economy.

Six asset management companies have recently been approved to join the Qualified Foreign Limited Partner (QFLP) program or the Qualified Domestic Limited Partner (QDLP) program, which provide easier access to the Asian country’s fund markets. from the east.

After gaining approval, leading private market investment firm Hamilton Lane will be the first to establish a secondary fund through the QFLP program in Shanghai; and BlackRock, the world’s largest asset manager, will be the first entirely foreign-owned public offering fund under the QDLP program.

Hu Ning, managing partner of CDH Investments, a global investment firm that also received approval, said the firm was optimistic about its long-term investment in a U.S. dollar fund in China and was attracted to Shanghai’s high-level opening up policies.

“Chinese assets can not only achieve steady growth, thanks to the domestic real economy, but [also] gradually [act as] safe havens in global markets,” Hu said.

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Founded in 2002, CDH Investments focuses on long-term investments, such as pensions, endowments and insurance funds.

Shanghai’s expanded investment programs signaled a steady trend of investing in China, as continued global uncertainty and volatility further underscored the country’s importance to businesses around the world.

Despite economic headwinds, China’s gross domestic product grew 4.8% in the first quarter of 2022, beating forecasts, from a year earlier, offering a sign of stability in a world unstable.

The country also remains committed to opening up. This year, its efforts in this regard range from the implementation of the negative list for foreign investment, to the expansion of the investment incentive catalog, to the improvement of investment promotion services and the addition of new cities to the service sector opening pilot programme.

The stability and openness offered by China has prompted a number of international companies to channel more energy into their business here.

Pan Swee-ting, China Manager for Jafco Group Co. Ltd., looks forward to more opportunities in China’s transition to high-quality development in the future after achieving significant economic growth over the past few years. last four decades. The financial company recently increased its investment quota under the QAFP.

“Over the past two years, the [coronavirus] The pandemic has had a major impact on economic activities around the world. But with effective controls, China has maintained normal production and further strengthened its position in the global industrial chain,” Pan said.

As Covid-19 and its variants — particularly the highly transmissible Omicron — have brought new challenges, Pan believes China can strike a balance between epidemic control and economic development.

Earlier this month, China’s State Administration of Foreign Exchange confirmed that the country continued to see net cross-border capital inflows in April as supply and demand in the domestic foreign exchange market were still in balance.

China has strong economic resilience and great potential, and its solid long-term fundamentals will not change, said Wang Chunying, deputy director of the agency.

A survey by the China Council for the Promotion of International Trade showed last month that the majority of foreign companies in China still see the country as one of their key strategic markets, despite the challenges posed to their businesses by the Covid outbreaks. -19. Some 86% of respondents say they are satisfied with China’s policies to stabilize foreign investment.

Thanks to China’s unwavering opening-up efforts, global enterprises will continue to share its development dividends in the future.