BEIJING, Oct. 25 (Xinhua) -- After the release of data on China's economic growth in the third quarter (Q3), some major foreign-funded institutions are taking a more optimistic attitude towards China’s market.
Goldman Sachs, Deutsche Bank, JPMorgan Chase, and ANZ Bank, among other foreign-funded financial institutions, have lifted China’s full-year GDP growth forecast, showing boosted confidence in the Chinese economy.
-- Chinese economy is stabilizing and picking up with good momentum
An array of indicators in Q3 show that the Chinese economy is stabilizing and picking up with good momentum, according to Xing Ziqiang, Chief Economist at Morgan Stanley China. Export is recovering, represented by China's high-end manufacturing industry, which is becoming more competitive. In addition, consumption, particularly in the services sector, is seeing a rebound.
"Consumer spending in Q3 registered a 6 percent compound growth rate compared to pre-pandemic levels in 2019, up from 5.4 percent in Q2," said Xing Ziqiang.
Xing Ziqiang also noted that some highlights could be found in the manufacturing sector, such as electric vehicles and green transition, which has enabled the upgrade of the value chain.
Since August, policies have been rolled out to resolve outstanding debt, boost commodity prices, improve consumer expectations, and unleash the vitality of private enterprises. Adjustments have also been made in real estate and monetary policies, Xing added.
-- Multiple institutions upgrade full-year GDP growth forecasts
Recently, some foreign-funded financial institutions have lifted their economic forecasts for China. Due to inventory cycles, policy support, and the steady recovery of export, China's economic growth rate is expected to pick up from 3.2 percent in the second quarter to 5 percent in Q4, with an annual growth rate of 5.4 percent, as predicted by Goldman Sachs.
Ye Xiong, Chief Economist for Deutsche Bank China, expects that China's economic growth rate will reach 5 percent in Q4, registering an annual GDP growth rate of 5.1 percent. Both JPMorgan Chase and ANZ Bank have raised their annual GDP growth projections for China by 0.2 percentage points.
A recent report by Nomura underlines that the government clearly hopes to revitalize the economy and adheres to a "tactical overweight" approach on domestic shares. The risk-adjusted return for Chinese stocks continues to grow, said Rory Green, Chief Economist at Lombard Bank.
-- Foreign-funded institutions increase their business footprint in China
In May 2023, Morgan Stanley received approval from the China Securities Regulatory Commission to establish a futures company, and has beefed up efforts to make sure it can open business as soon as possible.
In February 2022, the registered capital of Morgan Stanley Securities (China) Co., Ltd. went up from 1.02 billion yuan to 1.718 billion yuan, with Morgan Stanley's shareholding ratio further increasing to 94.06 percent. This year, the registered capital of the group's wholly-owned subsidiary, Morgan Stanley Investment Management China, rose from 250 million yuan to 600 million yuan, up by 140 percent.
In addition to Morgan Stanley, many other foreign-funded institutions are also ramping up their registered capital. For example, Neuberger Berman’s registered capital increased from 150 million yuan to 300 million yuan; BlackRock from 700 million yuan to 1 billion yuan; and Schroders from 260 million yuan to 503 million yuan. FIL Asia Holdings Pte Limited made a third investment for Fidelity Funds, bringing its registered capital from 100 million U.S. dollars to 130 million U.S. dollars.
(Edited by Yang Linlin with Xinhua Silk Road, linlinyanglyn@163.com)
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