China provides “significant opportunity” for investors, corporations
China provides “significant opportunity” for investors, corporations

China provides “significant opportunity” for investors, corporations

The Chinese market provides “a significant opportunity” for global investors and corporations, as the market is buoyed by the country’s robust economy and its sustained efforts in advancing reform and opening up, a U.S. expert has said.

China not only is equipped with booming middle-class consumers, but also shines in fostering innovation and embracing new technologies, which creates tremendous opportunities, Brendan Ahern, chief investment officer of the Krane Funds Advisors, a U.S. asset management firm specialized in China-focused exchange traded funds (ETF), told Xinhua in a recent interview.

“At the same time, China has provided outstanding returns for investors,” evidenced by the impressive performance the MSCI China technology sector had scored over the years, said the expert in global financial markets with a particular focus on China.

Ahern noted that as the country’s onshore equity and fixed income markets open up, investors around the globe have the chance to gain exposure to a broader range of companies and take advantage of the exciting opportunities that China offers.

“China has done an exceedingly good job in providing increased access to foreign investors, foreign asset managers, brokers, dealers, and insurance companies,” Ahern said, noting China’s decades-long dedication to its opening up is “a very strong testament” that the country continues the trajectory “very much firmly.”

“The opening of China has been happening for decades, certainly providing access into the China A-share market and more recently the bond market,” he said, adding the move “is providing a wealth of opportunities for global corporations to bring their services to the Chinese market,” benefiting both the companies and their shareholders.

The market expert said “foreign ownership of Chinese A-share is growing” especially after the advent of the stock connect program and MSCI’s inclusion of Chinese A-shares to their indices, and he believes the tendency is likely to continue, bolstered by a favorable macroeconomic backdrop.

The Chinese A-share market has been very resilient this year, driven by investors who have a positive view of how companies will benefit from the economy and the government’s handling of coronavirus, he said.

Commenting on the volatility in China’s offshore listings following recent regulatory moves, Ahern said the market jitters came as “many investors have temporarily stepped to the sidelines,” and it is important to have a rational perspective toward regulation.

“Regulation is not a bad thing,” and in some key sectors, “regulation is warranted,” said the expert, adding “we think that the finish line is in sight as we’ve seen increased transparency from the regulators.”

According to Ahern, KraneShares CSI China Internet ETF, or KWEB, which holds U.S. and Hong Kong listed Chinese companies, has seen a very significant inflows of about 6 billion U.S. dollars this year.

“That’s a strong indication that investors believe that these innovative companies will be able to adhere to and adapt to the regulation,” he said.



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