Investment prospects in China 'promising', forum hears

Leaders of financial behemoths at the Asia Financial Forum on Wednesday voiced their confidence in China’s investment prospects in the coming years with the growth in private market assets in the country.

Financial pundits shared their insights during a panel discussion on Asia-led multilateralism during the forum. The two-day event held both in-person and online aims to gather global officials, as well as experts in the finance and business fields, to exchange opinions and explore investment opportunities.

Nicolas Aguzin, CEO of Hong Kong Exchanges and Clearing, said China is taking “a prominent role” in Asian capital markets where two-thirds of global IPOs came from last year.

Chinese capital markets are now valued at about $30 trillion, he said, estimating that they will grow to over $100 trillion in the next decade. “Some of that will be a result of reallocation of assets. … The savings for Chinese investors mostly are directly toward real estate and bank deposits, and a lot of that will be recirculated in capital markets,” he noted.

Aguzin said Chinese domestic investments and savings in international assets account for less than 5 percent of the total amount of capital market investments, “so there is also a huge opportunity to create cross-border flow”.

Samuel Tsien, former group CEO of OCBC Bank, predicted that China’s economy will have a strong rebound, which will lead to capital liberalization and benefit countries in the Regional Comprehensive Economic Partnership.

President of the Bank of China Liu Jin suggested that financial institutions in Asian trade blocs work on harmonization, such as unifying e-commerce rules to push paperless trade, thus building a financial ecosystem.

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Levin Wang Lei, CEO of Huatai Financial Holdings (Hong Kong), said China’s growing appetite for overseas investments will empower neighboring economies and boost the Asian supply chain.

He also put an emphasis on the rise of the middle class, citing data from the World Economic Forum. He said that two-thirds of the world’s middle-class people, who have a huge purchasing power, will be in Asia by 2030, and this will benefit the wealth management businesses of financial institutions.

Jacky Chan, regional chief executive and group chief distribution officer of AIA Group, welcomed the resumption of quarantine-free travel between Hong Kong and the Chinese mainland, which is expected to reinvigorate Hong Kong’s economy despite external headwinds.

The Hang Seng China Enterprises Index has rallied since the start of the year to 7,310.92 on Wednesday, representing a 9 percent increase compared to the end of 2022.