Rising China is already having a huge impact on the global economy and on global capital markets and there is little sign of this waning in the medium term. In macroeconomic terms, China simply cannot be ignored. With an economic growth rate of more than 10%, the country is set to become the world’s second-biggest economy by the end of the year. And the communist country’s embracing of market forces means that it is having a similar impact on capital markets. With US$1.4trn in foreign reserves and that figure increasing by a staggering...Read more
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The dragon is turning. A host of challenges, including inflation and a stronger renminbi, may cause investors to reconsider their China options. As some opportunities lose a little lustre, others are starting to shine such as inland China or the increasing appetites of Chinese state, corporate and individual investors for overseas assets.
Despite the credit crunch that began with sub-prime problems in the US mortgage sector, there does not seem to be any let-up in the flow of private-equity deals in Asia – not even in China where the regulatory obstacles to leveraged buyouts remain formidable.
Despite the remarkable performance of Chinese stock markets and the rapid growth in foreign investment, poor transparency, scarcity of established prime broker involvement and irregular dealing practices continue to mean local Chinese managers are under-represented in foreign portfolios. Therefore opportunities for established foreign hedge-fund managers investing in China are greater than ever.
With an increasingly diverse range of borrowers accessing the market, China’s syndicated loan market has seen activity increase in 2007. But regulatory measures designed to slow China’s economy limit the prospects of a full-scale loans boom emerging.
China Investment Corp, the sovereign fund responsible for improving returns on China’s foreign currency reserves, officially opened for business in September. And with US$200bn to play with, it is expected to have a sizeable impact on global markets.
Petrochina’s much-talked-about stock market debut may have grabbed the headlines and surpassed Shenhua’s IPO record set earlier this year, but Shenhua remains a trailblazer – not only because it has brought diversity to Chinese stock markets by opening the gates for other non-financial sector stocks to list there, but also because the company serves as a proxy for Chinese energy companies.
Chinese real estate developer Country Garden is close to issuing an international bond that will add around US$1.5bn to the US$1.65bn the company raised in an extremely successful IPO earlier this year, and provide Country Garden with ample cash – and more -- to fund its forthcoming projects.