China's steady pace of economic reform, growing capital markets, and continued push for innovation are reinforcing its role as a key destination for global sovereign investors, according to Massimiliano Castelli, Head of Strategy and Advice for Global Sovereign Markets at UBS Asset Management.
Speaking in an interview with China Media Group (CMG), Castelli said China's economy and capital markets have become increasingly significant in the portfolios of central banks and sovereign institutions, reflecting the country's expanding global influence and confidence in its long-term stability.
"China is a very important economy in terms of size and of course in terms of its capital market. And the share of RMB denominated assets in the portfolio of central banks and sovereign institutions in general has been growing over the last few years. If I may say, if I look at the last ten years, we had a very big rise from 2015 when the RMB was included in the SDR basket. Then over the last few years we saw some slow down, but actually, over the last few months in 2025, we started to see positive signs of resuming of this trend,” said Castelli.
"There is more interest about China both in fixed income, which is largely what the central banks are normally investing, but also in the equity market. I think we are at the beginning of this positive trend for China, and I believe that is sustainable, particularly if we continue to see improvement in the Chinese economy and progress in reforms, which as far as I can see in these days reading the newspaper in China, that you're doing the plans for the next five years, it is actually happening," he added.
China's continued reform and opening-up have made its financial system more accessible and resilient, providing international investors with new opportunities in a diversified and fast-evolving market.
Castelli noted that the renminbi's growing share in global reserves and rising investor confidence are closely linked to China's long-term development strategies and reform agenda.
As China advances plans for high-quality development - emphasizing innovation, green transformation, and the deepening of financial market reforms - global investors are taking notice of the country's growing potential.
"I think that a steady path of reform in China is very important for continuing to attract capital into the Chinese capital markets. And also if I look at the plans that you mentioned there is definitely a continuous focus on attracting capital in the key sector of the Chinese economy. This is more about the equity market, but just think about the green transition or high tech, semiconductors, artificial intelligence. There is a very strong story of China catching up with the U.S. in tech, and this is definitely an area where I think investor are looking at the moment," said Castelli.
"Finally, you look at the performance of the Chinese stock market. I was reading that actually yesterday the Chinese store market passed the peak of 2015 once again. This is a very positive sign because so far, we saw diversification away from the U.S. assets. Because investors want to have more diversified portfolio. This diversification mainly involves Europe and Japan and other advanced economy. Now we are starting to see this trend to broaden to China and the emerging market. So, definitely, China has an opportunity that I'm pretty sure it will grasp in the future as this capital flows continue," he added.
China’s steady reform, growing markets boost global investors' confidence: UBS strategist
