Emerging Markets Outlook

Understanding China - Danger and Opportunity

The top 10 China papers of the last month

Many investors still lack an understanding of China, its financial markets, and the role that it plays in the global economy. The first paper below, from FTSE Russell, provides a great overview of China's equity markets and the seven different Chinese share classes.

The other papers in our list focus mainly on China's economy and currency. The Chinese economic recovery since 2015 has been underpinned by debt growth. The papers below examine China's economic evolution, the risks of a debt crisis, the dangers of a trade war, and the latest trends in the internationalisation of the renminbi. They also explore opportunities in Chinese (and other EM) equity and bond markets.

Shanghai China investment best white papers

China through the mosaic of its share classes (FTSE Russell)
China’s share classes represent the arc of the country’s transformation from a dormant agrarian society to bustling centre of global commerce. This FTSE Russell paper paints a picture of that change.

China's tricky economic evolution: signposts to watch (BlackRock, Feb 2017)
This paper by BlackRock assesses China's economic rebalancing act. Whilst the country's debt-driven growth model is starting to reach limits, it's also transitioning into a high-tech, more consumer-driven economy. 

China's central bank gives yuan fixing mechanism another tweak (BNP Paribas)
This article by BNP Paribas considers China's economic balancing act of structural reform, economic liberalisation and financial market.

The internationalisation of China's currency: trends / implications (KPMG, 2017)
China’s Renminbi is arguably already a major international currency and one growing in importance. In this KPMG report, over a dozen industry participants are interviewed for a clearer view of the outlook.

Emerging Markets' elevated risk premium needs to change (Pioneer Investments)
This paper by Pioneer Investments explores how emerging market governments and companies could improve their, and investors’, prospects through superior governance and transparency.

China's Continuing Credit Boom (FRBNY, Feb 2017)
This paper by the Federal Reserve Bank of New York assesses the drivers of China’s credit expansion, its increasingly complex financial system, and the evidence that its credit supply may be growing faster than reported.

FTSE Russell China Bond Research Report, 2017
In 2016, China faced FX, bond market and capital outflow challenges. Despite this, debt holdings by foreign institutions increase 21.9 billion RMB. This FTSE Russell report gives more detail.

US-China: Trump Risks a Dangerous Confrontation (Pictet WM, Feb 2017)
US-China relations have become an important source of market volatility. Rising tensions between the two countries are set to come to a head under Donald Trump’s presidency.

Emerging Market Local Debt Enters Its Prime (OppenheimerFunds, Feb 2017)
The market for locally denominated bonds in emerging markets has matured significantly. It now offers more attractive risk/reward characteristics than ever before.

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