Source: Economic Information Daily
Recently, with the release of China's first quarter macroeconomic data, many foreign institutions, such as Deutsche Bank, Goldman Sachs, UBS, raised their expectations for China's economic growth in 2024. Several data also show that at present, overseas institutions are actively laying out the domestic financial market. Looking forward to the future, the domestic economy will continue to recover and make efforts towards the good superposition policy, which will provide a good and stable macro environment for overseas investors, and the long-term investment value of RMB assets will become more prominent.
According to the data recently released by the National Bureau of Statistics, China's gross domestic product (GDP) in the first quarter, calculated at constant prices, grew 5.3% year on year and 1.6% month on month over the fourth quarter of last year.
"China's GDP growth in the first quarter exceeded expectations." Xiong Yi, the chief economist of Deutsche Bank in China, recently released a research report saying that, boosted by strong holiday travel demand, China's service industry output in the second quarter is expected to maintain a growth of more than 5%. At present, the willingness to consume has steadily improved, while the savings rate has also cooled. It is expected that this positive momentum will continue. According to the report, taking all factors into consideration, Deutsche Bank raised the GDP growth forecast of China in 2024 by 0.5 percentage point to 5.2%.
In addition to Deutsche Bank, several foreign financial institutions recently raised their expectations for China's economic growth this year. Goldman Sachs raised its forecast for China's GDP growth in 2024 from 4.8% to 5.0%. Shan Hui, chief economist of Goldman Sachs in China, pointed out that due to the strong performance of the manufacturing industry and the resilience of household consumption, China's economic growth momentum is still stable and is steadily moving towards the growth target of "about 5%" this year.
In addition, DBS Bank raised China's GDP growth forecast for 2024 from 4.5% to 5%, Citigroup raised China's GDP forecast for this year from 4.6% to 5%, and the Asian Development Bank, UBS and Morgan Stanley also raised their expectations for China's economic growth this year.
While foreign institutions cast a "vote of confidence" in China's economy, they also expressed their optimism about investment opportunities in China's financial and capital markets.
Fidelity International believes that under the support of a number of favorable factors, the optimism of the market is budding. The theme of investing in the long-term growth of the Chinese market has not changed. As China's economic growth enters the next stage, a new round of investment opportunities will follow. Chen Yongshi, head of the team of directors of fixed income investment in Asia of Fidelity International, said recently that the Chinese government continued to introduce supportive measures to encourage the upgrading of durable goods through subsidies or targeted credit support (such as reducing the down payment ratio of auto loans), which will release more opportunities for industrial production and manufacturing.
According to the latest data released by the State Administration of Foreign Exchange, the scale of foreign capital's increased holdings of domestic bonds has shown a significant recovery in recent years. In 2023, foreign investors will increase their net holdings of China's bonds by $23 billion, while the net increase in the first quarter of this year has reached $41.6 billion. By the end of March this year, foreign positions had exceeded 570 billion US dollars, accounting for about 2.6% of the total domestic bond custody, up 0.2 percentage points over the end of last year. Wang Chunying, deputy director and spokesman of the State Administration of Foreign Exchange, said at the press conference of the State Council Information Office recently that the investment in domestic bonds by overseas institutions is expected to continue the steady growth trend. "The international influence of RMB is gradually increasing, and RMB assets have become an important choice for overseas institutions in their global investment layout."
In addition, northbound funds returned to A-shares again significantly, which became another signal for foreign institutions to actively layout RMB assets. According to the data, the accumulated net inflow of northward capital in the first quarter of this year was 68.223 billion yuan, which has exceeded the scale of 43.7 billion yuan of net inflow of northward capital into A-shares in 2023.
Looking into the future, insiders believe that with the continuous development of various macro policies, the domestic economy will continue to recover and improve, which will provide a better and stable macro environment for overseas investors, and the long-term investment value of RMB assets will also become more prominent.
Wang Chunying said: "At present, the People's Bank of China and the Administration of Foreign Exchange plan to open up repurchase business for more overseas institutions, and study and expand more application scenarios, including the use of bonds through the bond channel to offset the margin of the swap channel, while optimizing the direct market entry of overseas institutions, the operation mechanism of the bond channel and the swap channel, and continuously strengthening communication with overseas institutions to create better Investment environment. "
"The two-way opening of China's capital market continues to advance, and the interconnection between domestic and overseas financial markets continues to deepen. Nomura will continue to lay out China's capital market and provide comprehensive financial service solutions for Chinese customers." The chief executive officer of Nomura Asia Pacific Holdings and the chairman of Nomura Holdings China Committee, Mr. Toyoda, said in a recent media interview.
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