Last year, the inflow of northbound funds exceeded 430 billion yuan——

　　Foreign investors warmly embrace Chinese assets

　　Our reporter Li Hualin

　　Despite multiple unfavorable factors such as repeated epidemics, foreign capital inflows will remain strong in 2021.

The data shows that in 2021, there will be a net inflow of northbound funds for 12 consecutive months, with a cumulative net inflow of about 432.2 billion yuan, a record high annual net inflow.

While the total volume has set a new record, the investment structure is more interesting, and the allocation of manufacturing industry has been greatly improved, indicating that foreign capital is highly concerned and recognized by the high-quality development of my country's real economy.

　　Experts said that as my country's capital market continues to open to the outside world and the macro economy continues to recover steadily, in 2022, foreign capital will continue to actively embrace Chinese assets and share China's development achievements and opportunities.

　　The basic orientation is good to attract foreign capital inflow

　　Looking back at the beginning of 2021, overseas epidemics have repeated, superimposed that major international index companies have basically completed the inclusion of A shares, and the incremental scale of passive funds has gradually decreased. It shows that the strength of northbound capital inflow is completely unexpected by the market.

　　Why did the inflow of northbound funds hit a new high against the trend?

Experts believe that this is mainly due to the steady performance of my country's economy, the continuous improvement of the policy environment and the continuous improvement of the market ecology.

　　"my country was the first in the world to control the epidemic, the economy was the first to recover, development resilience continued to show, and foreign investment continued to flow in," said Tian Lihui, dean of Nankai University's Institute of Financial Development.

The latest data released by the National Bureau of Statistics also confirms this point. In November 2021, the national economy continued to maintain a recovery trend, industrial and agricultural production rose steadily, the employment situation was generally stable, and high-quality development was steadily advancing.

　　Li Qiusuo, executive general manager of CICC Research, said that under the impact of the epidemic, China's economic growth is more stable than other markets. China is still the main gathering place for global growth targets, and the valuation of leading companies is more attractive than that of international comparable companies.

　　On the other hand, overseas, affected by repeated epidemics and other factors, some countries have serious economic and social problems.

"In response to the impact of the epidemic, some countries have implemented large-scale quantitative easing policies, which have brought about a revaluation of asset values. International 'smart money' needs to actively seek safe havens." Tian Lihui said.

　　A series of new two-way opening-up measures launched by my country's capital market, including lowering the threshold for foreign investment, promoting the facilitation and liberalization of cross-border investment, and enriching international financial products, have facilitated northbound capital investment.

In addition, the RMB exchange rate has generally appreciated in the past year, and the valuation of A-shares is relatively low, attracting international capital to enter the Chinese capital market.

　　"The high-level opening of the capital market is advancing in an orderly manner, the reform of the registration system is steadily progressing, and the market ecology continues to improve. Under the support of multiple factors, the willingness of foreign capital to enter China's capital market continues to increase." Li Zhan, Chief Economist of the Research Department of China Merchants Fund Express.

　　Optimistic about the development of China's manufacturing industry

　　In general, the northbound funds in 2021 will be characterized by increased scale, active allocation, and focus on manufacturing.

"The proportion of actively allocated funds in northbound funds has increased." Li Zhan said that in 2019, the three major international indexes of MSCI, FTSE Russell and S&P Dow Jones concentratedly included or expanded the inclusion factors of A shares. That year, the inflow of northbound funds exceeded 350 billion yuan.

　　In 2021, international index companies have not yet further increased the inclusion factor of A shares.

"This means that the foreign capital inflow of more than 400 billion yuan in 2021 is not the result of passive funds following the mechanical allocation of the index, but active funds to increase the allocation of A shares, indicating that the allocation value and attractiveness of my country's capital market is constantly improving." Li Zhan said.

　　Northbound funds have always been known as "smart money", and their allocation trends can not only show foreign investors' judgments on the prospects of a certain industry, but also provide insight into changes in macroeconomic development.

CICC data shows that the current absolute foreign positions are still concentrated in consumer stocks, such as household appliances, leisure services and food and beverage industries.

At the same time, the attention of northbound funds to my country's manufacturing industry has been increasing. In 2021, more than half of the net purchases of northbound funds will flow to the midstream manufacturing industry.

Of the more than 400 billion yuan of net purchases, more than 100 billion yuan flowed into the electrical equipment industry, and the chemical and electronics industries also received 56.7 billion yuan and 47.2 billion yuan of net purchases respectively.

　　"my country's manufacturing industry has unique competitive advantages such as a 'big, long, comprehensive' industrial chain and engineer bonus. In 2021, my country's manufacturing industry will maintain rapid development in the face of various challenges, and its competitiveness will gradually be recognized, which will drive foreign investment in my country's manufacturing industry. Configuration increased." Li Qiusuo said.

　　Li Zhan believes that the changes in the northbound capital allocation industry indicate that the logic of foreign investment in China has quietly changed. In addition to the huge consumer market, my country's advanced manufacturing and high-end manufacturing are increasingly recognized internationally, and its strength in emerging fields such as carbon neutrality And the right to speak is also gradually improved.

At the same time, the substantial inflow of northbound funds will also promote the further development of these industries, which is conducive to promoting the high-quality development of the real economy.

　　Expected to maintain strong inflows

　　Looking forward to 2022, the market is generally optimistic about the inflow of northbound funds.

　　"Foreign investment will continue to embrace Chinese assets." Li Zhan said that when the Central Economic Work Conference deployed the economic work in 2022, it proposed to continue to do a good job of "six stability" and "six guarantees", continue to improve people's livelihood, focus on stabilizing the macroeconomic market, and maintain economic operation. within a reasonable range.

With the strong support of macro policies, my country's economy is expected to continue its steady recovery in 2022, the fundamentals of enterprises will continue to improve, and the attractiveness of foreign investment will be further enhanced.

　　The research department of CICC believes that in 2022, overseas supply chain risks may bring pressure on the appreciation of the renminbi, and promote foreign investment to allocate Chinese assets.

At the same time, China's high economic growth, high competitiveness of the manufacturing industry and further opening of the capital market are expected to continue to attract foreign investment.

　　"Although after years of continuous inflow, the current shareholding ratio of foreign capital in A-shares is still low. China's economic growth is still resilient, its manufacturing advantages will remain for a long time, and northbound capital inflows will continue to expand." Tian Lihui said that the current my country's capital market has grown into an important financial market in the world. The total market value of A-shares exceeds 90 trillion yuan, and the number of listed companies exceeds 4,000. The large economic volume contains a strong ability to undertake funds.

　　In order to further attract overseas investors to enter the Chinese market and promote the greater development of the A-share market, in recent years, my country has expanded the door to opening up, and on the other hand, has made great efforts to remove various obstacles to the entry of foreign capital.

Not long ago, the China Securities Regulatory Commission publicly solicited opinions on the revision of the "Several Provisions on the Interconnection Mechanism for Stock Market Transactions in the Mainland and Hong Kong", and implemented strict supervision on the so-called "fake foreign investment", so as to promote the market's continuous movement towards standardization and transparency, and to better facilitate the real foreign investment. invest.

　　More opening-up measures are in the pipeline.

Yi Huiman, chairman of the China Securities Regulatory Commission, publicly stated recently that in accordance with the unified deployment of the country's new round of high-level opening up, he is studying and launching relevant measures to further expand opening up, including continuing to expand the scope of the Shanghai-Shenzhen-Hong Kong Stock Connect, expanding and optimizing the Shanghai-London Stock Connect. system, expand the supply of international varieties of commodities and financial futures, and promote the establishment of a qualification certification mechanism for overseas practitioners.

　　"As my country's capital market continues to open up to the outside world, the pace of northbound capital will continue to accelerate in the future, and foreign capital will become more and more involved in China's capital market." Tian Lihui suggested that while implementing a series of new measures for opening up as soon as possible, it is also necessary to Pay attention to the relationship between opening up and preventing risks. Relevant departments should strengthen research and judgment, improve the monitoring of cross-border capital flows, and prevent financial risks caused by large inflows and outflows of foreign capital.