Why a Financial Crisis is NOT Brewing in China (Institutional Investor)
While western investors living far from Asia express concerns that rising debt will plunge China into a global financial crisis similar to that of 2008, local financial leaders expressed a different view during an April 13 lunch hosted by Institutional Investor at the Foreign Correspondents Club in Hong Kong. In fact, attendees believe that China is getting its financial house in order and may emerge as a capital markets powerhouse rivaling the U.S. in the coming decade.
Schulte Research International CEO Paul Schulte had this to say:
“China is never having a 2008 crisis. I don’t think it’s going to happen… When you are running current account surpluses of $550 [billion] and $600 billion annually, it means you are in control of your banking and financial system.”
Note: In the run-up to the global financial crisis, the U.S. had an account deficit of about 5% of GDP.
Joshua Crabb, the head of Asian equities for Old Mutual Global Investors, also pointed this out:
“The U.S. markets are trading at three times book value. Asian capital markets are trading at 1.6 times book value. If the markets are going to collapse, which is what many are predicting, Asia has to get more expensive first.”
To read the whole article, What the West Misses About China, go to the website of Institutional Investor. In addition, check out our China ETFs list and our China Closed-End Funds list.
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- Some Key Points: The Renminbi & China Commercial Paper Market (KraneShares)
- China’s $246B Foreign M&A Buying Spree Is Slowing (Bloomberg)
- Are There Greater Opportunities In Asia’s Frontier Markets Than in China? (FT)
- Lazard Emerging Markets Fund Manager: Full-blown Financial Crisis in China is Unlikely (FE Trustnet)
- Emerging Market Investors Need to Think Beyond Investing in the BRICs (II)
- EM Push & Pull: As China Rises, Competition for Capital Heats Up (Aviva Investors)
- Allocation and Share of Institutional Investors in Emerging Market Funds (EM Equity)
- China’s Mutual Funds Industry Now the Second Biggest in Asia (The Asset)
- Investors Rethink Emerging Market ETFs (FT)
- Asia is Home to 50% of World’s Fastest Growing Companies (Nikkei Asian Review)
- Macro Tailwinds That Could Propel China’s Internet Sector (KraneShares)
- Fund Managers Are Wary of “Cheap” Asian Stock Markets (FT Adviser)
- Lessons From a Decade of Chinese Stock Trading (WSJ)
- Vietnamese Verses Chinese Retail Investors (AFC)
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