Foreign financial firms confident in China’s future
Global leading financial institutions, including Neuberger Berman and Fidelity International, have announced moves to increase their registered capital or set up branches in China recently, highlighting their confidence in the future of the Chinese economy as well as vast opportunities the market creates for foreign financial players.
Neuberger Berman Fund Management (China) Co, the Chinese unit of US asset manager Neuberger Berman, has raised its registered capital by 40 percent to 420 million yuan ($58.11 million).
It’s the third capital increase for the company in China, the Economic Information Daily reported on Wednesday, citing data provider Tianyancha.
“We believe that there is still considerable potential for China’s growth in the global capital market, largely hinging on the openness of the Chinese capital market,” Patrick Liu, head of Asia Pacific of Neuberger Berman, told the Global Times in a previous interview.
As China persistently advances opening-up and innovatively restructures its capital market, we anticipate a steady inflow of overseas capital, he said.
According to Wind data, the inflow of northbound capital – money invested from the Hong Kong Special Administrative Region into the Chinese mainland through stock connect programs – stood at 60.7 billion yuan in February, the highest in about a year. Between February 1 and March 25, northbound capital inflows reached approximately 83 billion yuan.
Recently, Fidelity International announced the opening of a new Beijing office and added $30 million to the registered capital of its China funds unit, taking its overall capital base to $160 million.
“Our long-term commitment to the China market is unchanged,” the company told the Global Times.
Industry analysts said that these moves reflect a positive long-term view of the economy.
“Compared with developed economies whose financial sectors are mature, China’s financial industry has vast development potential. Moreover, the A-share market remains at a relatively low level, which means long-term investment value,” Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Wednesday.
Industry analysts said that these moves reflect a positive long-term view of the economy.
The long-term fundamentals of the Chinese economy remain unchanged, and thus increased investment will help global financial institutions diversify risks, especially risks from US-led protectionism and financial instability, said Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China.