As China continues to promulgate new laws and deepen the country’s supervision of its largest companies, investors around the world are asking whether the new laws can Actually benefit Other emerging markets. On this occasion, the Chinese government has continued to disrupt the market through regulatory crackdowns on the country’s technology giants in recent weeks.
according to ReutersIn just one week, the market value of Hong Kong and China’s exchanges has evaporated by 500 billion US dollars. After warnings and warnings were issued, other economic sectors from construction to cryptocurrency also fell into Beijing’s crosshairs. Court ruling Players were played in both areas.
In response to this lightning-fast regulatory action, the renminbi has experienced some of the biggest devaluations since the COVID-19 pandemic spread globally in March 2020. For China, this new movement seems to be in line with the plan made by President Xi Jinping to support “Common prosperity“Rather than the “excess income” of the wealthy elite.
For some market observers, this reduces their enthusiasm for investing in China, but others see this as an opportunity to explore different options. They are particularly concerned about markets where commodity prices may rise to promote global economic recovery, including China.
Although the economic recession triggered by COVID-19 has exposed how China’s economic turmoil has spread to the global market, Beijing’s recent intervention does not seem to bring the same risks.
Caesar Massry, managing director of emerging markets at Goldman Sachs, stated in a research report Barron’s Weekly As long as the risk remains limited to domestic regulations and wider market concerns, any spillovers will be limited.
Bank of America strategist Jure Jeric also hypothesized that if the Chinese stock market “coughs” due to unexpected regulatory changes, emerging markets can actually see gains.
Reshma Kapadia Written in Barron’s Weekly on Monday Different views on the consequences of China’s new policy may reflect the difficulty of integrating emerging markets into one group.She pointed out that this moment provides “a reason to carefully consider how investors use emerging markets”, especially through Emerging Market Index Still severely exposed to the Chinese market.
