Where will the "living water" of global capital flow
"Investors need to look at China's development with a forward-looking perspective, such as the reform of China's factor market and the promotion of some large projects." Among the small, medium and micro enterprises in the vastness of China, small and micro enterprises lead to economic growth on the one hand and people's livelihood on the other.”
---------------
At present, under the superposition of multiple risks, different economies around the world are facing different short-term, medium-term and long-term risks and pressures.
Where will global capital flow in this scenario?
What are the investment opportunities in Asia?
What are the prospects for investing in China?
A few days ago, at the 13th Caixin Summit, a number of experts from the industry and academic circles expressed their views on these issues.
Asia remains a bright spot for the global economy
The global economy is facing greater downward pressure.
In October, the International Monetary Fund (IMF) lowered its forecast for global economic growth in 2023 to 2.7% from 2.9% in July.
The forecast for the growth rate of developed economies in the euro zone next year has been lowered from 1.3% to 0.5%. Among them, the growth forecast for Germany has been lowered from 0.8% to minus 0.3%.
At the meeting, IMF First Vice President Gita Gopinath said that at a time when the global economy is facing severe challenges, the outlook for the global economy may be even gloomy in 2023.
"The worst is yet to come," she said.
From an investment perspective, Wu Yibing, chairman of Temasek China and co-president of global technology and consumer investment, said that the overall global investment environment still faces great challenges.
He found that in the past, investment activities were driven by returns and continued to drive globalization. However, investors are now paying more attention to multiple factors such as security issues and supply chain resilience when evaluating.
So, what are the future economic prospects for Asia?
Steven Barnett, chief representative of the IMF in China, believes that "Even if the global economic environment is so bleak, Asia is still a good growth region."
The IMF's forecast for the economic growth rate of emerging markets and developing economies in Asia is 4.4% in 2022 and 4.9% in 2023.
Compared with the past, although this growth rate is not strong, it also shows expectations for the Asian economy.
At the same time, Steven Barnett also pointed out that compared with developed countries, the new crown pneumonia epidemic has a greater and longer-term impact on the economic growth of some emerging economies in Asia. This is a medium-term challenge facing Asia. .
He pointed out that this is because the debt of Asian companies is relatively high, and some regions are also accompanied by the problem of shrinking labor supply, so there is a greater possibility of decline.
According to Zhou Qiangwu, vice president and chief administrative officer of the New Development Bank, although the economic growth rate of Asia this year and next is far lower than the average growth rate of 5.5% in the past 20 years, overall, Asia is still the leader of the global economy. highlights.
At the same time, Zhou Qiangwu also pointed out that from the perspective of capital supply, the public sectors of some economies generally have limited fiscal space and long-term insufficient investment in the future, making it difficult to ensure continuous and stable investment.
However, due to the characteristics of long investment cycle, large investment volume and uncertain returns, the private sector is obviously not willing to invest.
In this regard, he believes that to break through the bottleneck of investment and financing, not only need to increase capital investment, but also need effective investment and financing mechanisms and platforms to mobilize more resources, especially leverage the investment of the private sector, such as multilateral development banks A platform and mechanism.
Investors are confident in China and Southeast Asia, two markets
Investors' confidence in Asia and China is gradually recovering.
At the meeting, Wu Yibing said that the weakening trend of China's economic growth may have bottomed out in the second quarter, but the subsequent recovery is still not balanced.
"However, we are very positive to see that the recent introduction of policies to optimize epidemic prevention and control and support the stable and healthy development of the real estate market has boosted the confidence of the market and investors in China's economic development."
On November 11, the Comprehensive Group of the Joint Prevention and Control Mechanism of the State Council issued the "Notice on Further Optimizing the Prevention and Control Measures of the New Coronary Pneumonia Epidemic Prevention and Control in a Scientific and Accurate Way", announcing 20 measures to further optimize the prevention and control work.
As an investor, Wu Yibing values clear policies and effective communication.
He believes that the introduction of the new measures is a very important event, and it is also one of the events that global investors are most concerned about, giving investors a "reassurance".
President of the European Union Chamber of Commerce in China Woodker has more expectations for the Chinese market.
Woodker said, "The current investment environment is actually getting better and better. Some overseas companies not only see the continuous development of China's economy and the continuous inflow of investment, but also see opportunities in Southeast Asia, India and other regions. Therefore, we continue to promote Invest in China."
Investing in China or investing in Southeast Asia has become the focus of some investors.
Temasek has been deeply involved in the Chinese and Southeast Asian markets for many years.
Wu Yibing said that the two major markets are at different stages and have different advantages, but both have emerged opportunities brought about by structural trends.
"These two markets are complementary."
He believes that as China continues to move towards high-quality development, the overall industrial chain is being upgraded, and the technological content is getting higher and higher. A number of local-based enterprises with global presence have emerged, and they have gradually developed into all-round champion enterprises.
In the field of subdivision, there are also leading individual champions and special new "little giants".
"There are opportunities for digital reconstruction and upgrading in every link of the entire industry chain. We can see these trends and opportunities in medical, consumer, technology and other fields."
Wu Yibing also said that the trends and accumulated experience seen in China in the past can be used for reference when investing in the Southeast Asian market.
In recent years, the fundamentals of Southeast Asia have developed steadily, and the rich demographic dividend has attracted the migration of industrial chains and supply chains.
At the same time, the middle-income group continues to expand, driving consumption growth and upgrading.
The convergence of digitalization and sustainable development has also created new opportunities.
Wu Yibing said, "In general, the two markets are very complementary, and we are full of long-term confidence in both markets."
Deeply plowing China to find a new path
How do you view the prospect of investing in China?
Steven Barnett said that from a long-term perspective, China is still a market with great development potential.
Fang Fenglei, founder and chairman of HOPU Investment, believes that the current situation in the whole world is not clear enough, and it is time to test who is wiser and has a longer-term perspective among investors.
He said that for investors, the Chinese market has many advantages.
First of all, from the perspective of global asset allocation, the Chinese market cannot be ignored.
With the increasingly open foreign investment access policy, in the future, the proportion of foreign capital in China's bond market may increase from less than 4% currently to 10%-15%.
The huge potential of China's consumer market is still very attractive to investors.
Previously, he said that China is one of the few "good ports" that can provide substantial returns for large-scale funds, and "West flows east" is the general trend.
According to data released by the Ministry of Commerce, from January to October this year, the actual use of foreign capital in the country was 1,089.86 billion yuan, a year-on-year increase of 14.4% on a comparable basis, equivalent to 168.34 billion US dollars, an increase of 17.4%.
Fang Fenglei also pointed out that investors need to look at China's development with a forward-looking perspective, such as the reform of China's factor market and the promotion of some large projects.
At present, many opportunities contained in the integration of the Guangdong-Hong Kong-Macao Greater Bay Area are gradually emerging.
Li Xiaojia, founder and chairman of Diguantong Group, is concerned that some European and American investors have a certain degree of anxiety about investing in Asia and China.
However, more investors outside Europe and the United States are more optimistic about China's long-term positive trend and hope to establish deep links with China.
He said, "There will definitely be a large number of (investors) coming from China, and everyone should have confidence."
Li Xiaojia believes that as an investor, you should invest your money in China's "deep soil", that is, invest in China's vast small, medium and micro enterprises. Small and micro enterprises lead to economic growth on the one hand and people's livelihood on the other.
Li Xiaojia introduced that Diguantong has launched a new investment model called "Daily Revenue Sharing Contract" (DRC), which means that investors share according to the daily income of the store.
This is an investment model based on small stores, that is, when the small store has income, it starts to share the shares with investors according to the contract, until the agreed return is completed, and the investors leave after the distribution is completed.
He explained, "It's not a stock, nor a debt. If the store fails, it doesn't have to pay back the money."
"Basically, we are too busy." Li Xiaojia said that in their Qianhai office in Shenzhen, small and micro business owners who came to raise funds lined up in front of the office. Most of them are full of confidence in this market and come here to seek to open a store Funding.
On the other hand, recently, there have been frequent news of international listed companies plummeting.
Li Xiaojia believes that in the traditional Wall Street model, most capital markets will choose to invest in listed companies.
However, when the pessimism among investors is contagious, investors "run away", causing companies to be "trampled" and lose value, and this is not because some companies themselves have problems.
Li Xiaojia said that at present, they adopt a large-scale and decentralized investment method, and make shallow contact with the income side of small stores. The investment process is simple and fast, which avoids the above-mentioned drawbacks of the Wall Street model.
According to this model, China's consumer finance is likely to take a completely different path from the Wall Street model.
Zhao Limei, trainee reporter of China Youth Daily and China Youth Daily Source: China Youth Daily