UBS chief sees brighter prospects for 2017

How do you see Chinese companies’ M&A trend in 2017?

Chinese M&A activities were strong in 2016. While we expect lower outbound activity this year, we are going to continue to see interest from Chinese investors to diversify their operations and invest their money not just domestically but also internationally. UBS has been a leading M&A advisor in the country, participating in many of the landmark deals, and we expect continued interest from our clients in this field.

What do you think are the opportunities for UBS, as China promotes the Belt and Road Initiative?

It will add i nvestment opportunities in the Asian region. It is something we are observing very closely. Most of the projects will be related and linked to infrastructure investment.

UBS is one of the banks that has always looked favorably at private and public partnerships i n financing growth. UBS being present in all the major markets in Asia will contribute to this growth and investment opportunities.

We are not concretely involved in any specific projects yet, but I think the whole initiative is shaping up well.

We believe such a targeted investment program will create more constructive interaction and dynamics in the region.

It should be very favorable for growth and business opportunities and for banks like us in the region.

As a former policymaker, what is your suggestion for Chinese policymakers?

Striking the right balance between the countervailing forces in the economy is the challenge faced by Chinese policymakers.

If interest rates were to rise, it could jolt growth and have a negative impact on the economy.

If the rates were to fall further it could accelerate the depreciation of the currency and produce new financial bubbles in other areas.

I think keeping the monetary policy as it is and using capital controls, to sustain the opening up process in an orderly fashion, is an appropriate policy choice.

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