Article by Reshma Kapadia of Barrons.com
China is the 800-pound panda in any conversation about what is going on in the world today. The nation dominates the headlines, is the most-cited reason for sleeplessness among corporate executives, and puzzles investors daily. China looms particularly large for investors in the emerging markets: It represents an uncomfortably outsize stake in most portfolios. And fund managers are getting nervous.
The challenges are daunting. China is growing at its slowest pace in decades — a slowdown that began before the trade war. In past downturns, Beijing printed massive amounts of money to stimulate the economy, but that has resulted in high government debt that prevents it from taking similar measures now. China has also been bracing for a protracted struggle in the conflict with the U.S. over not just trade, but also technology and geopolitical leadership. To complicate the situation, mass pro-democracy protests in Hong Kong that began in June are still going strong, presenting the biggest threat to Beijing’s power in decades.
Not surprisingly, stock investors are reassessing their China stakes and have pulled $13 billion out of equities this year, according to EPFR Global. Meanwhile, the MSCI Emerging Markets index is increasingly a China play: Nearly a third of its weighting is in China, up from 19% just five years ago. Continue reading Emerging Market Funds Try to Sidestep China
Asian equity markets ended mostly higher on Monday as the Yen weakened after Japanese trade balance figures missed expectations, and oil prices held steady after posting their first weekly decline in five weeks on concerns over rising production and swelling stockpiles in the US.
Reports showed that Japan posted a merchandise trade deficit of 1,086.9 billion yen in January as exports slowed down due to a decline in US exports and the timing of Chinese New Year holidays. That missed forecasts for a shortfall of 625.9 billion yen following the 640.4 billion yen deficit in December.
Chinese shares ended higher after reports that pension funds are entering the stock market. Investor sentiment was also boosted after China’s securities regulator unveiled new rules on Friday restricting excessive and frequent fundraising by some listed companies. Continue reading Asian Equity Markets Review – 20Feb2017
Since the beginning of the year, recovery of the global economy underperformed expectations, as increased divergence between the macroeconomic policies of major economies and Brexit added to uncertainties in the global economy. Against such a background, the Chinese economy managed to stay broadly stable, with all major indicators within a reasonable range. However, structural problems were still obvious, and the pressure of economic downturn was great. Against an external environment with mounting difficulties and austere challenges, we improved management, and deepened reform, innovation and business transformation. We actively resolved the various difficulties, fostered stability, made progress, realized stable operation, and achieved tangible interim results. Continue reading ICBC Investor Update Q3 2016