U.S. investors skeptical about China’s move to widen markets
U.S. asset managers and hedge funds are wary about pouring more money into China until the government addresses its stock market crash last year and wild swings in the yuan, they said on Tuesday, as China unveiled measures to attract U.S. buyers of its assets.
China will give the United States a 250 billion yuan ($38-billion U.S.) investment quota for the first time to buy Chinese stocks, bonds and other assets, officials said, deepening financial ties and interdependence between the world’s two largest economies.
China’s regulators have been pushing to expand foreign investors’ access to domestic financial markets to make its markets broader and attract more capital inflows. But foreign interest has waned after a near meltdown in Chinese stock markets last year and heavy-handed official intervention to shore them up.
“I would imagine that investors would look for certain financial reforms in order to dive in,” said Gregory Peters, a senior investment officer at Prudential Fixed Income with more than $621-billion of assets.
Much of the pain in retail is due to the upheaval in the apparel industry.
According to data from the U.S. government, nearly 13,000 jobs have been lost at clothing and clothing accessories stores in the past three months. Fast fashion upstarts are making life more difficult for some of the older mall-based stalwarts.
Australia has amassed a huge pile of debt—over 120% of GDP—and most of it is mortgage debt on overvalued real estate. Now that Australia’s economy, which was driven by commodity exports to China, has tanked, a lot of this debt is being turned into interest-only loans, because Australians no longer have the money to repay any of the principal. But what if they can’t make the interest payments either? The obvious solution is to refinance their mortgages as interest-only at zero percent; problem solved! Of course, as conditions deteriorate further, the Australians will become unable to afford taxes and utilities. Negative interest rates to the rescue! Refinance them again at a negative rate of interest, and now the banks will pay them to live in their overpriced houses.
A tech boom spurred by companies like Twitter Inc., Uber Technologies Inc. and Airbnb Inc. has transformed San Francisco into one of the hottest economies in the U.S. The unemployment rate was 3.1 percent in April, the lowest since 2000, and home values are at a median of $1.1 million, the largest among the 50 biggest U.S. cities. Mayor Edwin Lee on May 31 released a record $9.6 billion budget proposal.
China will give the United States a 250 billion yuan ($38-billion U.S.) investment quota for the first time to buy Chinese stocks, bonds and other assets, officials said, deepening financial ties and interdependence between the world’s two largest economies.
China’s regulators have been pushing to expand foreign investors’ access to domestic financial markets to make its markets broader and attract more capital inflows. But foreign interest has waned after a near meltdown in Chinese stock markets last year and heavy-handed official intervention to shore them up.
“I would imagine that investors would look for certain financial reforms in order to dive in,” said Gregory Peters, a senior investment officer at Prudential Fixed Income with more than $621-billion of assets.
China central bank chief economist forecasts 6.8% growth in 2016
