Top US, European investors bullish on China

Top investors from the US and Europe are increasingly making longterm bets on China, as they believe that the world’s second-largest economy is on a fast track to recovery and will bring them significant gains.

Now is the time to make longterm investments in China because the nation is set to bounce back after the pandemic, said the head of Allianz Global Investors, one of Europe’s biggest asset managers, according to a report by the South China Morning Post on Tuesday.

“Investors should play the long game, work on a new mindset toward China and turn away from [labeling] China a ‘risky terrain’. China is an economic powerhouse in the world, undoubtedly with potential,” CEO Tobias Pross said.

The UBS Chief Investment Office expects China’s economic growth to recover further on resilient infrastructure and manufacturing, as well as a pick-up in consumer spending, read a statement on its website on October 24.

Those bullish views are in line with the Wall Street, as a “chorus of ‘buy China’ calls is getting louder” there, according to a Wall Street Journal report on Sunday.

For instance, Morgan Stanley lifted its targets for the country’s stock gauges last week, expecting the MSCI China Index to rally 14 percent by the end of next year.

The optimism of foreign investors mostly came from strong policy support from the central government, which has precisely targeted the country’s “pain points” and worked on them, observers said.

“There are currently two obstacles that plague the recovery of the domestic economy, one is the pandemic, and the other is a weakening real estate market.” Luo You, a researcher at the Star Atlas Institute of Finance, told the Global Times on Tuesday.

“However, the recent introduction of policies has marginally improved these two areas, and sent positive sentiment through the market,” Luo noted.

China’s Ministry of Industry and Information Technology (MIIT), along with two other ministries, jointly issued a notice on Monday.

The notice listed 17 measures to shore up the development of major industries, varied enterprises and different regions of the country as a stronger move to bolster economic growth.

In the real estate sector, the People’s Bank of China (PBC), the central bank, convened a symposium along with the China Banking and Insurance Regulatory Commission on Monday.

During the meeting, PBC Deputy Governor Pan Gongsheng noted that the PBC will launch a 200 billion yuan ($28 billion) loan support plan for six commercial banks, so that they can help in guaranteeing house deliveries, according to a report by the Economic Daily.