Slowing China remains investors’ favorite

Despite a slowing economy, China remains a favorite among businessmen in terms of providing the highest investment returns this year.

During the two-day Asian Financial Forum (AFF) organized by the Hong Kong Trade Development Council (HKTDC) this week, China ranked first with 30.3 percent of the votes in the on-site, real-time survey on markets offering the best investment returns. It was followed by the United States (23.4 percent), Southeast Asia (17.5 percent) and of India (12.7 percent).

The surveys were aimed at gauging the views of participating financial and business executives on key issues relating to the global economy and investment environment.

In terms of industrial sectors with the greatest potential to drive global growth, 23.4 percent of the survey respondents picked green industries/environmental goods and services, followed by telecom, media and technology (20.1 percent), e-commerce (20.1 percent) and healthcare (18.7 percent).

Other sectors put to the vote were real estate and infrastructure (6.4 percent) and financial services (6.2 percent). Food and agriculture (4.3 percent) and luxury products (0.7 percent) were seen as having less potential to drive global growth.

Big event

Co-organized by the Hong Kong Special Administrative Region (HKSAR) government and the HKTDC, the Asian Financial Forum featured more than 90 prominent speakers, including top government officials and business and financial leaders from around the world, topbilled by Ben S. Bernanke, former chair of the US Federal Reserve Board. The forum was attended by more than 2,800 financial experts, CEOs, professional investors and high networth individuals from 38 countries and regions.

On the overall economy, however, the prevailing sentiment among the forum participants was one of pessimism.

Survey results showed that most participants were not upbeat about the prospects for the global economy this year.

Only 15.8 percent were optimistic about the global economic outlook compared with 43.7 percent who were pessimistic and 40.5 percent who expressed a neutral view.

When asked about the biggest risk to the global economy this year, 36.3 percent of the participants cited the potential for a hard landing of the Chinese mainland economy, followed by geopolitical tensions (21.8 percent), collapse of energy and commodity prices (20.4 percent) and uncertainty about the pace of US interest rate normalization (17.9 percent).

China factor

During the panel discussion on China opportunities, participants were asked for their opinions on the outlook for the Chinese economy this year.

In 2015, China achieved 6.9 per cent growth, and more than 90 per cent of AFF participants predicted that the mainland’s growth in 2016 would not exceed 7 percent. More than half of participants expected mainland growth to be lower than 6.5 percent in 2016, while 42.5 percent expect growth of between 6.5 and 7 percent.

Meanwhile, 37.6 percent believed economic opening up and structural reform would be the main growth factor for the mainland economy, followed by domestic demand (20.4 percent) proactive fiscal policy (14.5 percent) and speedy urbanization (12.1 percent).

As for the greatest threat to the mainland economy in 2016, local government debt and shadow banking problem received 27.1 percent of votes, followed by a global economic crisis (24.8 percent), collapse in the property sector (17.4 percent) and decline in export demand (13.6 percent).