CIMB Wealth Advisors | China to Lead the Region as New Global Financial Hub

Kuala Lumpur: If one were to compare China to other global major economies, one can conclude that China’s rapid economic recovery could be indicative of its evolution as a new global financial hub.

Economic development remains a top priority for China especially with the US$585 billion Chinese government stimulus package, said Senior Vice President & Chief Executive – Asia for Principal International, Rex Auyeung. He spoke at a recent briefing organised by CIMB-Principal Asset Management Berhad (“CIMB-Principal”).

Auyeung, who provided an update on the Greater China region’s development and recovery, said that in 2003, the Forbes World’s Biggest Companies List had not listed any Chinese companies in the top twenty. “However this has since changed and by 2009, five companies from China made it on the list. Furthermore three of these companies are among the top five of the list--PetroChina, China Mobile and Industrial and Commercial Bank of China Ltd,” said Auyeung, adding that this illustrated his point that China and Chinese companies are making the mark. He also added that the Shanghai Stock Exchange is currently the 5th largest in the world by market capitalisation.

An expert with 14 years of experience in the China region, Auyeung also highlighted the emergence of China’s domestic consumption. China is now transforming from being export-led towards a domestic demand-driven growth model. It is expected that China will soon be able to consume its own goods, which can contribute to at least 2.5% of its GDP growth. The recovery in the housing market has also generated higher demand for household goods.

He continued that they are confident that China is the leading destination in the region for investment opportunities as the Chinese economy continues to show growth given the current economic climate.

According to Auyeung, “The Chinese government has perceived and achieved a balance between short-term and long-term measures to increase consumer confidence. For instance, the issuance of shopping vouchers is a short-term measure to kick start consumption. This is balanced by longer-term initiatives like building hospitals and providing healthcare services. Having a social safety net in place will generally increase consumer confidence and spending long-term as individuals realize that the state will help to provide for health care. These types of long-term measures will fundamentally drive domestic consumption to a new level on a more permanent basis.”

Also present at the briefing was J. Campbell Tupling, Chief Executive of CIMB-Principal and Tan Beng Wah, Chief Executive of CIMB Wealth Advisors, the major distributor for their newly launched CIMB Islamic Greater China Equity Fund.

Based on their risk appetites, Tupling encouraged investors to capture on the opportunities in China to diversify their portfolios. Investors may consult any CIMB Wealth Advisors consultant who can provide the right approach to help them with their investment decisions.

The CIMB Islamic Greater China Equity Fund now has a fund size of RM38.4 million as at 29 June.

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