This year, industry insiders believe that China opening up is not an act of "reconciling" with the United States to ease tensions, but out of self-interest. China has turned to a "dual cycle" strategy and will continue to open its doors. In this strategy, the domestic market becomes the main growth driver, supplemented by foreign demand..
So, the world's major banks and fund companies have increased their business in China, and a record US$212 billion of foreign capital has poured into China's bond and stock markets. At the same time, Washington has introduced various measures aimed at decoupling from China. But these turbulences have not shaken the chance of global finance rushing to China to seize profit share-it is estimated that by 2026, investment banking profits alone will increase to 47 billion US dollars. Goldman Sachs and JPMorgan Chase are currently pushing for full control of their joint ventures in China, and fund giants such as the Blackstone Group have also been approved to open branches.
There are indications that after Biden takes office, the US Congress will continue to confront the line, and the financial industry may fall into it. At the same time, Beijing has vowed to continue to relax barriers to China's capital market.
In a year of turbulent world situation, China's push has paid off. After successfully containing the epidemic, China's economy has outperformed its major competitors. According to a September survey by HSBC Qianhai Securities, nearly two-thirds of more than 900 global institutional investors and large companies plan to increase their investment in China by an average of 25% in the next year.
China opening up actions were noticed by Washington. This week, a committee of the US Congress warned that China’s financial opening is part of a “well-planned strategy” to obtain foreign investment and use it to support the domestic economy. The US Congress passed a piece of legislation this week that could cause Chinese companies from the US to delist.
So far, China’s response has been to continue along the path of further opening up. Openness shows that China is realizing that in order to have world leadership in politics and finance, they need to embrace openness and become one of the largest countries in the world in all these markets.
S. L. Li Engineer
HKFDP
香港建設專業聯會
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