Chapter three: What’s your next move in China investing?
Investing in China lately has come with higher risks and volatility, but the scale and variety of opportunities on offer remain compelling to those looking for returns across asset classes for the long run.
Why we think China bonds should be a core holding
Why we think China bonds should be a core holding
Hayden Briscoe sees China fixed income to remain attractive due to the relatively low global yield environment and low correlation between China and global bond markets.
Defend the center with the Central Cannon opener
Fixed income
Fixed income
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The long-term investment case for onshore China fixed income is likewise intact. Given the still relatively low global yield environment and the low correlation between China and global rates, we expect China fixed income to remain attractive vis-a-vis other global bond markets both on a yield basis and also from a diversification point of view.
In the short term, we expect the China fixed income market to still trade based on domestic economic fundamentals that are under huge downward pressure. Exports are expected to remain relatively strong despite COVID lockdowns in several cities, which will add to GDP growth in 2022, but with the ongoing Ukraine war, European and US demand could slow and add to the pressure from the global economic slowdown. Both factors could trigger more aggressive monetary and fiscal stimulus in China. We think there is still room for China rates and monetary policy to be accommodative, as stated in a government work report by Premier Li Keqiang on behalf of the State Council. This will continue to support China fixed income.
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Introducing our leadership team
Meet the members of the team responsible for UBS Asset Management’s strategic direction.