'Chinese assets' win global recognition

Updated: Nov 14, 2023 By Yang Yang Print
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"Chinese assets" win global recognition as a series of prominent international financial institutions are bullish on China's economic outlook in 2024, Securities Daily reported on Tuesday.

These institutions include Goldman Sachs and UBS who are optimistic of China's economic growth next year and are willing to increase their holdings of A shares.

Goldman Sachs' Chief China Equity Strategist Liu Jinjin anticipates a 12 percent and 16 percent increase in the MSCI China Index and the CSI 300 Index, respectively, in 2024, according to 2024 China Macro Economic Outlook and Stock Market Strategy as the report said.

China's real GDP growth is expected to reach 4.8 percent in 2024 by Goldman Sachs, 0.2 percentage points higher than the 4.6 percent projection by IMF on Nov 7.

The reasons for the confidence in Chinese economy lie in stable consumption; increased government fiscal support; and higher proportion of investments in real estate, infrastructure, and manufacturing, said Goldman Sachs' chief China economist Shan Hui.

China's real GDP growth is projected to reach 4.4 percent in 2024 with the consumption and service sector continuing to recover, according to UBS' Director of Asian Economic Research and Chief China Economist Wang Tao.

With the further recovery of the service sector, consumption will continue to normalize in 2024 and residents' real income is expected to grow by about 5 percent, according to Wang.

China's A-share valuation has demonstrated strong attractiveness for international investors. Marty Dropkin, head of Equity Investments in the Asia-Pacific region at Fidelity International, expresses a highly optimistic view of the Chinese market, citing attractive valuations.

Dropkin sees long-term potential in the Chinese capital market, especially in specific stocks and industry opportunities.

Liu Jinjin highlights the low valuation of the Chinese stock market, making it appealing to overseas investors.

Sectors like new infrastructure, renewable energy, electric vehicle supply chains and mass-market consumption are worth considering, according to Liu.

Goldman Sachs maintains an overweight position on China's technology, media and telecommunications (TMT) sectors and the mass consumption sector for 2024, Liu said.

Fidelity's Investment Strategy Director Meng Qiao emphasizes the maturation of the Chinese market at both the investor and market levels, and sees promising trends in China's economic and industrial development.

China is the world's second largest economy, accounting for 18 percent of the world's GDP, but A-shares account for less than 3 percent of the various indexes of global asset allocation, which shows that China's capital market has great room for development in the future.

China will continue to expand the breadth and depth of its financial market reform and opening up, which will attract more long-term funds to actively participate in the Chinese market.

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