Skip to main content
PGIM LogoPGIM Logo
    • Megatrends
    • Annual Best Ideas
    • OutFront Series
    • Portfolio Research
    • Quarterly Market Outlooks
    • Market Events
    • Thought Leadership
    • Events & Webinars
    • Video Library
    • ESG Investing
    • Investing in Alternatives
    • Opportunities in EM
    • Risk Management
    • Clients We Serve
    • Defined Contribution
    • Financial Advisors
    • Institutional Relationships
    • Institutional Advisory & Solutions
    • Global Locations
    • Contact Us
    • Overview
    • Leadership
    • History
    • Diversity, Equity & Inclusion
    • Global Locations
    • Jennison Associates
    • PGIM Fixed Income
    • PGIM Private Capital
    • PGIM Real Estate
    • PGIM Quantitative Solutions
    • PGIM Portfolio Advisory
    • PGIM Investments
    • Montana Capital Partners
    • PGIM DC Solutions
    • Contact Us
    • Subscribe
    • Request for Information
    • Careers at PGIM
    • Job Opportunities
    • All News
    • Press Releases
    • In the News
    • Facts & Figures
    • Media Contacts
China sunset with mountains
China Investment Symposium

The China Investment CounterpointTheChinaInvestmentCounterpoint

Nov 12, 2020

Share
  • Mail
  • LinkedIn
  • Twitter
  • Copy URL

Share

RESOURCES

  • Webinar Summary

As one of the largest and most important economies in the world, China is almost universally viewed by investors through a bullish lens. In the first two sessions of PGIM’s China Investment Symposium covering public debt and public equity markets, our experts talked about the upside in China. Part three of our series, featuring Stephen Joske in a fireside chat, focused on some of the less-bullish considerations that institutional investors should give weight to before allocating to China. Mr. Joske, having spent much of his personal and professional life in and around China, brings a unique perspective to the dialogue. He has worked for both the Australian Treasury and Australian Embassy in Beijing, and he served as the head of the Economist Intelligence Unit’s China Forecasting Service. Most recently, he advised AustralianSuper on financial market implications of Chinese macroeconomic issues.

Following are a few highlights of the discussion:

  • China is still an immature market: There is a well-established, long-term trend of slowing growth in China, driven in part by demographics, and that trend is likely to continue. Other EM countries such as Vietnam, India and Bangladesh are poised to grow more quickly and may offer better investment returns over time. China’s financial sector is also in relatively poor condition, and the possibility of cross-border capital controls tightening is real. While not a reason to ignore China altogether, investors need to be cognizant of the risks.
  • Size doesn’t matter: While China’s economy is huge and offers impressive market depth, that size isn’t necessarily an indicator of long-term investment returns. India, for example, has a far smaller economy than China but has performed much better for equity investors over the long term. With China's growth easing, better returns may be available elsewhere due to both higher growth rates and more rational financial markets. To be more attractive for the long term, China has to get past its short-term macro risks while steadily developing market maturity.
  • For CIOs, go local: Institutional investors in China should tread carefully when index investing and when considering strategic partnerships with Chinese companies. Chinese equity indices have not generated sustainable returns and may be more suited for short-term investors who are prepared to act more quickly. Meanwhile, various governance structures among Chinese companies can make them difficult to partner with over time. For equity exposure to China, institutional investors should be deliberate about finding good local managers – or global managers with on-the-ground expertise –and limit the range of companies in which they invest.
  • Does the US election change the outlook?: The US-China trade war is a symptom of broader geopolitical risks generated by Chinese strategic miscalculation. Many of China's international relationships are driven by a cold war mentality in China and won't be significantly influenced by attitudes in other countries. Relations with the US could also deteriorate as the US tries to build a global coalition against China, and geopolitics could continue to be a negative for investors in China.

The next installment of PGIM’s China Investment Symposium, slated for early 2021, will focus on post-US election implications of the US-China relationship and its impact on the investment landscape. In the meantime, to access previous webinars visit our China Investment Symposium page.

About Stephen Joske

Stephen was Senior Advisor to the Australian Treasurer during the 1997-98 Asian financial crisis. He later worked as the Senior Treasury Representative at the Australian Embassy in Beijing. Stephen also worked on Chinese economic issues at the Office of National Assessments. After leaving government he ran the Economist Intelligence Unit’s China Forecasting Service in Beijing and then spent six years with AustralianSuper in Beijing looking at financial market implications of Chinese macroeconomic issues.  

Learn More
China Investment Symposium

Examining China's rising role in the world economy.

Learn More

You may also like

China Helps Germany—And The EU—Through The Winter of The Second Wave
Fixed Income

China Helps Germany—And The EU—Through The Winter of The Second Wave

Feb 10, 2021

China’s continued recovery is providing a much-needed source of external demand, a vital offset to self-imposed Euro Area weakness via strict lockdown measures.

Risk, Reward, and Transparency in China's Bond Market
China Investment Symposium

Risk, Reward, and Transparency in China's Bond Market

Jul 24, 2020

The first installment of PGIM's China Investment Symposium series focuses on China’s growing bond market.

China’s Equity Market: Exposure, Access and Benchmarks
China Investment Symposium

China’s Equity Market: Exposure, Access and Benchmarks

Sep 29, 2020

PGIM brings together a panel of thought leaders to discuss China’s rising role in the global economy and surrounding geopolitical tensions.

  • Insights

    • Megatrends
    • Annual Best Ideas
    • OutFront Series
    • Portfolio Research
    • Quarterly Market Outlooks
    • Market Events
    • Thought Leadership
    • Events & Webinars
    • Video Library
  • Investment Themes

    • ESG Investing
    • Investing in Alternatives
    • Investing in Emerging Markets
    • Risk Management
  • Clients

    • Clients We Serve
    • Defined Contribution
    • Financial Advisors
    • Institutional Relationships
    • Advisory Solutions
  • About

    • Overview
    • Leadership
    • History
    • Diversity, Equity & Inclusion
    • Global Locations
    • Contact Us
    • Subscribe
    • Request for Information
  • Careers

    • Careers at PGIM
    • Job Opportunities
  • Newsroom

    • All News
    • Press Releases
    • In The News
    • Facts & Figures
    • Media Contacts
PGIM Logo
  • Terms & Conditions
  • Privacy Center
  • Accessibility Help
  • UK Regulatory Disclosures
  • Netherlands Regulatory Disclosures
  • Cookie Preference Center

For Professional Investors only. All investments involve risk, including the possible loss of capital.

This material is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence. PGIM is the principal asset management business of Prudential Financial, Inc. and a trading name of PGIM, Inc. and its global subsidiaries. PGIM, Inc. is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not imply a certain level of skill or training.

The information on this website is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. In making the information available on this website, PGIM, Inc. and its affiliates are not acting as your fiduciary.    

In the United Kingdom, information is issued by PGIM Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR. PGIM Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 193418). In the European Economic Area (“EEA”), information is issued by PGIM Netherlands B.V. with registered office: Gustav Mahlerlaan 1212, 1081 LA Amsterdam, The Netherlands. PGIM Netherlands B.V. is, authorised by the Autoriteit Financiële Markten (“AFM”) in the Netherlands (Registration number 15003620) and operating on the basis of a European passport. In certain EEA countries, information is, where permitted, presented by PGIM Limited in reliance of provisions, exemptions or licenses available to PGIM Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. These materials are issued by PGIM Limited and/or PGIM Netherlands B.V. to persons who are professional clients as defined under the rules of the FCA and/or to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II). In Italy, information is provided by PGIM Limited authorized to operate in Italy by Commissione Nazionale per le Società e la Borsa (CONSOB). 

In Japan, information is provided by PGIM Japan Co., Ltd. (“PGIM Japan”) and/or PGIM Real Estate (Japan) Ltd. (“PGIMREJ”).  PGIM Japan, a registered Financial Instruments Business Operator with the Financial Services Agency of Japan offers various investment management services in Japan.  PGIMREJ is a Japanese real estate asset manager that is registered with the Kanto Local Finance Bureau of Japan.

In Hong Kong, information is provided by PGIM (Hong Kong) Limited, a regulated entity with the Securities & Futures Commission in Hong Kong to professional investors as defined in Section 1 of Part 1 of Schedule 1 of the Securities and Futures Ordinance (Cap. 571). In Singapore, information is issued by PGIM (Singapore) Pte. Ltd. (“PGIM Singapore”), a regulated entity with the Monetary Authority of Singapore under a Capital Markets Services License to conduct fund management and an exempt financial adviser. This material is issued by PGIM Singapore for the general information of “institutional investors” pursuant to Section 304 of the Securities and Futures Act 2001 of Singapore (the “SFA”) and “accredited investors” and other relevant persons in accordance with the conditions specified in Section 305 of the SFA. In South Korea, information is issued by PGIM, Inc., which is licensed to provide discretionary investment management services directly to South Korean qualified institutional investors on a cross-border basis.   

Prudential Financial, Inc. (“PFI”) of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. 

You are viewing this page in preview mode.

Edit Page