On Monday, January 25, China's stock market rose to record highs.
As a result of the session, the index of the Shanghai Stock Exchange Shanghai Composite rose by 0.5% - up to 3624.24 points, and the indicator of the Shenzhen site Shenzhen Composite added almost 0.3% and reached 2462.85 points.
At the same time, during the trades, the indicators briefly rose above the levels of 3637 and 2486 points.
The values are at their highest since 2015.
As the expert of "BCS World of Investments" Mikhail Zeltser told RT, Chinese investors reacted positively to the publication of the report of the United Nations Conference on Trade and Development (UNCTAD).
According to the document released on January 24, at the end of 2020, China bypassed the United States in terms of attracted foreign direct investment (FDI) in the economy.
According to the calculations of the organization's specialists, as a result of the consequences of the coronavirus pandemic and the general recession in the global economy, the volume of FDI in the world decreased by 42% - to $ 859 billion. In the United States, the figure decreased by almost half (by 49%) - to $ 134 billion. on the contrary, it grew by 4% and amounted to $ 163 billion.
“The UN estimates only summed up the macro statistics of recent months about the outstripping growth of the consumer sector and production capacity in the PRC.
And the dynamics of the stock market just reflects the situation in the real sector of the economy - in the branches of material and non-material production, ”noted Mikhail Zeltser.
According to him, China's rise to the first place in the world in terms of FDI volume is associated with the introduction of strict quarantine restrictions and large-scale measures of state support for the economy during a pandemic.
The actions of the Chinese authorities made it possible to quickly restore the industry and the consumer sector, the expert said.
As a result, the Asian republic became the only major economy in the world to avoid a fall in 2020.
“At the same time, the low effectiveness of the policy to counter the spread of the epidemic played against the United States.
This led to the infection of 25 million citizens and 400 thousand deaths.
The United States also has a high share of the service sector (70% of GDP), which has been hit hardest by quarantine restrictions.
In addition, Washington's protectionism and sanctions wars against its trading partners can be attributed to negative factors, ”Zeltser added.
The republic's authorities laid the foundation for a large-scale inflow of investments into the Chinese economy several years ago.
This was told to RT by the Acting Director of the Institute of the Far East of the Russian Academy of Sciences Alexei Maslov.
According to him, in 2018-2019, the PRC leadership made a number of relevant changes to the country's legislation.
In particular, we are talking about exemption from income taxes, as well as a noticeable reduction or elimination of VAT when investing in advanced technologies.
“It turns out that investing in new production facilities in China is much more profitable than in the United States.
In addition, despite the rise in wages in the PRC, the final cost of production remains significantly lower than in the United States.
Well, the pace of development of the Chinese domestic market is ahead of the American one.
Thus, investments will at least pay off faster, ”Maslov explained.
Against this background, the coronavirus pandemic has become an additional incentive for the inflow of foreign money into the Chinese economy, experts say.
In particular, foreign investors were attracted by the noticeable strengthening of China's position in international trade.
Valery Emelyanov, an analyst at Freedom Finance, told RT about this.
“The total trade turnover of the PRC is greater than that of the United States, and, consequently, the share in world trade is also larger.
During the year of the pandemic, the gap widened by another couple of percent.
In 2021, the balance will probably play a little in the opposite direction, but China's role as a global workshop and dominant trading power will remain, ”the expert added.
Truck transports a container next to a cargo vessel at a port in Qingdao, Shandong
Reuters
As analysts of the international insurance company Euler Hermes believe, the consequences of the COVID-19 pandemic will accelerate the shift of the global economic balance towards Asia.
Moreover, already in 2030, China will be able to catch up with the United States in terms of GDP, according to the organization's experts.
Valery Yemelyanov adheres to a similar assessment.
According to him, due to its large population, China has been in the first place in the world in terms of production for a significant part of its history.
Meanwhile, since the industrial revolutions in Western countries and Japan took place earlier, the Chinese share in the world economy decreased for a certain time.
However, today the country is actively restoring its positions, the expert is sure.
“Now China is, in fact, regaining its place on the world economic map and is likely to catch up with the United States in terms of nominal GDP in the current decade.
But there are many obstacles here.
The states, for example, still retain their leadership in technology, and they clearly do not plan to give it up, ”concluded Yemelyanov.