Episode 97: Beneath Trade Clouds, China’s Transition Opens Opportunities
09 JUL 2018 - Rising trade tensions with the United States should not obscure the importance of China’s progress in transforming its economy and opening its markets, says Goldman Sachs Research’s Tim Moe, who sees sheer economic size and a diminished reliance on trade to fuel growth making China resilient to the direct impact of trade tariffs. At the same time, the inclusion of China A shares in global benchmark stock indexes means the Chinese market is poised to become an even bigger player on the global equity stage. “We have a very strong view that the opening up of the A-share market is something that investors globally really need to take very seriously and prepare for,” he says. A shares will be phased into global indexes slowly, but as their inclusion ramps, benchmarked funds will be required to hold a greater proportion of Chinese assets. And with that comes greater exposure to a "deep" market with ample opportunity for alpha generation, according to Moe.
This podcast was recorded on June 28, 2018.
All price references and market forecasts correspond to the date of this recording.
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