News

China: caught between control and openness

Great wall of ChinaThe Chinese response to recent stock market volatility shows "a serious tension between control and openness", according to a UK economist.

"The Chinese government is deeply worried about a sharp drop in the stock market," says Dennis Novy, who works for the University of Warwick. "Therefore, the government has been pumping a lot of financial firepower into the system to prop up markets."

Novy says the Chinese authorities' intervention to prevent some investors from selling was particularly controversial.

"Not surprisingly, this ban has rattled investors, further undermining confidence in the market," he says. "All this drama unfolds at a time when China is trying to open up its financial markets to international investors and turn the renminbi into an international currency."

The comment comes as Nigel Green, the chief executive of financial adviser deVere Group, advises investors to "China-proof" their portfolios to reduce risk.

However, some investors say Chinese intervention is not a cause for alarm. Emil Wolter, investment adviser at Comgest, says the moves are "not unprecedented".

"In our view they represent, at worst, a temporary step back in a continuing process of positive evolution and development of the domestic Chinese stock markets."

©2015 funds global asia

Executive Interviews

Executive interview: PGIM CEO on where the ESG flowers should bloom

Sep 27, 2021

David Hunt, president and chief executive of PGIM, tells Romil Patel about leading a top 10 global asset manager in times where “empowering and encouraging the kind of investment decisions as...

Executive interview: Nicolas Moreau’s orderly transition

Jul 12, 2021

Nicolas Moreau, CEO of HSBC Asset Management, is moving to Asia as the firm looks to connect more directly with the region’s growth story. ESG is also a key focus – including the ‘just’ carbon...

Roundtables

Roundtable: Singapore comes of age as an Asian ESG hub

Dec 01, 2021

Strong ESG credentials strengthen the case for Singapore as a leader in Asia of the post-Covid recovery. Our panel discusses the risks and opportunities.

Roundtable: How well geared are Japanese assets for a new world?

Jul 12, 2021

As we prepare to emerge from Covid, experts look at overcoming demographic issues through a combination of good tech and corporate governance, improving productivity and meeting an ambitious government carbon emissions reduction target. Chaired by Romil Patel.