Roundup: Economists Bullish on Chinese Capital Market

Economists Bullish on Chinese Capital Market

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Economists and analysts attending an economic forum Wednesday expected the Chinese capital market to be one of the best performing markets in the world with fruitful reforms.

Dai Xianglong, governor of the People's Bank of China, told a Fortune Global Forum roundtable that financial globalization has led to capital and technology inflow among countries and contributed to world economic prosperity.

Taking China for example, Dai said that to date, foreign direct investment in China has totaled 350 billion U.S. dollars, and the external debts reached 140 billion U.S. dollars. Foreign investment made up 10 percent or so of China's fixed asset investment.

The inflow of foreign investment to China helps increase the country's tax revenue, create more job opportunities and more important, give an impetus to China's structural reforms of its enterprises and contribute to China's 10 percent growth rate, Dai said.

Likewise, Dai said, China's economic opening up is also beneficial to world economic development. China's foreign currency reserves, net overseas investment by commercial banks and overseas investment combined totaled 280 billion U.S. dollars.

"Besides, in the past decade, China also imported foreign commodities worth of 1200 billion U.S. dollars," Dai said. He noted that most of commodities exported by China are consumer commodities, and this, to some extent, has "helped importer countries to maintain their low inflation rate."

Victor L.L. Chu Chairman and CEO of First Eastern Investment Group, believed China's accession into the World Trade Organization would create more opportunities for foreign investment, which would serve as a driving force for China's reforms of the structure of China's capital market.

Chu expected an "exciting" development" in China's capital market. Many companies have gotten listed in China after the country opened its stocks market ten years ago, which has set a sound foundation for further overseas investment, he said.

If China can maintain its social and financial stability in the future, its capital market will also make a takeoff, Chu predicted.

Kennet S. Courtis, Managing Director of Goldman Sachs Asia, also voiced optimism about the Chinese capital market, saying the international investors are "maximum bullish on China market."

China has many internal resources and, with efficient reforms, its stocks market will end up being one of the best performing and biggest market in the world, he concluded.