With the resumption of post-pandemic engagement, China's financial markets present new opportunities for global investors, despite geopolitical noises, experts said during a roadshow called The New Silk Road: Expanding Horizons held by Bloomberg in London on Tuesday.
China's Ambassador to the United Kingdom Zheng Zeguang attended the event and delivered a keynote speech to more than 150 representatives from major financial institutions in the UK.
"During the past 10 years, since the Belt and Road Initiative was proposed, it has made major progress on policy, infrastructure, trade, financial, and people-to-people connectivity," said Zheng. "It has become a high-quality public good initiated by China, built by the partners involved, and shared by the whole world."
China will further open up its financial sector, Zheng added, as the country has been streamlining the cross-border financial system and increasing the liquidity of renminbi assets in support of the initiative.
As China plans to hold the third Belt and Road Forum for International Cooperation during the second half of the year, Zheng said a series of new measures will be rolled out, which will focus not only on deepening the "hard connectivity" of the infrastructure, but also the "soft connectivity" of standards and rules, promoting the construction of an open world economy.
Constantin Cotzias, European director of Bloomberg LP, said the world financial market is seeing investors face a range of headwinds, including high and persistent inflation in certain markets, rising global tensions, and a challenging interest rate environment, and the relative success of financial integration between Chinese and global financial markets will be critical for the next wave of global growth.
"The continued development of market access into China for foreign investors is a testament to that, following the launch of stock connect and bond connect a few years ago, and the very recent addition of swap connect. That means, now, offshore investors have a new, highly efficient way to invest and hedge in China," said Cotzias. "The feedback we recently got from market participants and investors globally about their access to Chinese capital markets in new and progressively more sophisticated ways is really genuinely positive."
Experts in China's fixed-income market and commodity futures market shared their observations and insights during a panel discussion that was broadcast live through Bloomberg's financial terminal.
Norbert Ling, an ESG credit portfolio manager at Invesco, used three keywords – stable, sustainable, and supportive – to describe China's macroeconomic and financial policies.
"Sustainability is not just about green finance, it's also about quality growth … and this is where China stands out versus different emerging economies," said Ling, who added that the International Monetary Fund forecast global growth this year will be 2.8 percent, while China is predicted to have 5.2 percent or better.
Li Bing, head of Bloomberg Asia-Pacific, said the event was the second stop in a series of roadshows about China's financial market.
"We did a similar event in Hong Kong last week and surveyed the 150 attendees and around 50 percent of the audience in the room told us they are still optimistic about the China market," said Li, who added that various markets are dealing with different challenges because there is a lot of volatility in the global market.
"I think, at this point, when investing in the China market, people are no longer looking for the high-yield and high-return environment, but rather they are looking at a more stable market environment," he said. "The China market actually provides a real means of diversification for investors."
