Post by account_disabled on Feb 26, 2024 22:40:07 GMT -8
These developments highlight the fact that Chinese assets will play an important role in most investors' portfolios in the future. While foreigners today have a small portion of their portfolios invested in Chinese assets, particularly relative to the size of the Chinese financial markets and economy, we expect this to change dramatically in the coming years. The narrative went from “investing in China is probably smart” to “not investing in China is stupid.” Indeed, how could anyone with a fiduciary duty refrain from having exposure to the world's second largest economy and the world's second largest capital markets? As a result, China received record inflows of $576 billion in 2020 despite the debilitating impact of Covid-19, according to a JPMorgan note at the time. But a new report from Joyce Chang, JPMorgan's research president, lays bare just how fickle those flows have proven to be.
The numbers are quite staggering. The combination of a slowing Chinese economy, higher rates in the United States, reshoring and rising political tensions (and fears that any Chinese invasion of Taiwan could trigger Jordan Mobile Number List Russian-style exclusion from the US-led global financial system) has triggered a massive reversal in the economy. flowing. JPMorgan estimates that half of the roughly $250 billion to $300 billion of international money that flowed into Chinese bonds due to their inclusion in various indexes since 2019 has already flowed out. Foreign ownership of Chinese stocks has decreased by more than $100 billion. Private market trends are similar. JPMorgan estimates that Chinese investments by international private equity and venture capital firms, which have played a major role in the development of many major Chinese technology companies, have plummeted by more than 50 percent.
US investment in private equity and venture capital has fallen sharply since 2021 and will likely decline further with the release of the Biden administration's long-awaited Executive Order (EO) targeting overseas investment on August 9, 2023. The EO “Addressing United States Investment in Certain National Security Technologies and Products in Countries of Concern” and the accompanying Advance Notice of Proposed Rulemaking (ANPRM) issued by the Treasury Department target a small number of strategic Chinese sectors : semiconductors and microelectronics, quantum information. technologies and certain artificial intelligence systems, since the advancement and indigenization of these sectors with China would affect the national security of the United States.
The numbers are quite staggering. The combination of a slowing Chinese economy, higher rates in the United States, reshoring and rising political tensions (and fears that any Chinese invasion of Taiwan could trigger Jordan Mobile Number List Russian-style exclusion from the US-led global financial system) has triggered a massive reversal in the economy. flowing. JPMorgan estimates that half of the roughly $250 billion to $300 billion of international money that flowed into Chinese bonds due to their inclusion in various indexes since 2019 has already flowed out. Foreign ownership of Chinese stocks has decreased by more than $100 billion. Private market trends are similar. JPMorgan estimates that Chinese investments by international private equity and venture capital firms, which have played a major role in the development of many major Chinese technology companies, have plummeted by more than 50 percent.
US investment in private equity and venture capital has fallen sharply since 2021 and will likely decline further with the release of the Biden administration's long-awaited Executive Order (EO) targeting overseas investment on August 9, 2023. The EO “Addressing United States Investment in Certain National Security Technologies and Products in Countries of Concern” and the accompanying Advance Notice of Proposed Rulemaking (ANPRM) issued by the Treasury Department target a small number of strategic Chinese sectors : semiconductors and microelectronics, quantum information. technologies and certain artificial intelligence systems, since the advancement and indigenization of these sectors with China would affect the national security of the United States.