Growth pivot points to global lens on China

More opening-up measures to aid foreign players — consensus at forum

The focus of leading global financial institutions on China will remain unchanged given the country's growth prospects, executives at the 14th Lujiazui Forum said.

The forum, an annual financial industry event, was held in Shanghai on Thursday and Friday.

Kevin Sneader, president of Goldman Sachs Asia Pacific excluding Japan, said the company has forecast China's GDP to grow by around 6 percent this year.

The data, which may be adjusted later, is a key sign of China's importance as a world economic engine and shows Goldman Sachs' confidence in the Chinese market.

The idea that investing in China had become less profitable is definitely wrong, said Bruce Karsh, co-chairman of Oaktree Capital Management.

While the United States and Europe are experiencing soaring inflation and facing the risk of a recession, China's sound economic growth rate and the independent development of its financial sector support Karsh's belief in the Chinese market.

The fact that Chinese stocks and bonds have been included in the world's major indexes over the past few years also reflects the appeal of Chinese financial assets to global investors, Karsh said.

Meanwhile, China still has much room in its monetary policy to further stimulate the economy, which is different from most developed economies, he said.

Oaktree Capital is attracted to China's emerging industries, and it also holds a positive outlook on State-owned enterprises as their balance sheets, cash flows and returns to shareholders have improved with a number of reform measures, he said.

Over the past two decades, Oaktree has been actively investing in China, covering stocks and nonperforming asset packages. Its total investment value has exceeded 40 billion yuan ($5.6 billion) to date, according to Karsh. With a subsidiary set up in Shanghai in 2013, the company has served more than 100 institutions in China.

Karsh said he anticipates more opening-up measures in the Chinese financial market that will help foreign institutions roll out new products here.

Investors can also seek higher returns with more diversified portfolios, he said.

Joseph Amato, president of asset manager Neuberger Berman, said the size of the Chinese economy, its financial market, the country's long-term growth potential and the number of growth enterprises all point to the possibility of long-term returns for investors.

Although China faces challenges in its property sector, several other economies have also been confronted with the same issue. Capital will eventually flow to the most profitable and attractive sectors, with growth outlook serving as the most important catalyzer, Amato said.

Mark Tucker, chairman of HSBC Holdings, said China's stock connect programs and the development of its derivative markets were all conducive to the entry of more foreign investors.

Meanwhile, international financial institutions should seek opportunities from China's rapidly expanding green finance market, as the nation is already the world's largest green bond market, said Tucker.

As China moves toward its carbon neutrality goals, more financing will be needed, which can facilitate the development of financial institutions in the country, he added.