Despite the impact of the coronavirus pandemic, and continuing tensions with the US, China remains on course to become the world’s largest economy by 2030. This could represent the coming decade’s most transformative development in global financial markets – and a major opportunity for investors.
The coronavirus pandemic applied a sudden brake to China’s growth story, as it did to most economies around the world. But there are signs that China could be ready to lead the way out of the downturn and resume its long-term growth trajectory.
The opening of the China A-share market to foreign investors – and the subsequent growing inclusion of a much larger number of Chinese companies in widely used equity indices – is poised to be, in our view, one of the most transformative events in the financial markets over the next decade.
While the world battles the coronavirus pandemic, China has already made strides towards mitigating the virus’s effect on its people and economy. Although the country is not yet out of danger, we expect China’s economy to recover in the second half of this year – which could be another positive signal for China’s domestically driven A-share market.