Global EditionASIA 中文雙語Fran?ais
    Business
    Home / Business / Finance

    Expert: Impact of rise in US yields limited

    By ZHOU LANXU | China Daily | Updated: 2021-03-23 09:38
    Share
    Share - WeChat
    US one hundred dollar notes are seen in this picture. [Photo/Agencies]

    Economist notes inflows slowing but rules out capital flight from China stocks

    Government bond yields in the United States are rising. While this may slow foreign capital inflows into China, it may not spark capital flight or take a heavy toll on Chinese equities, said a leading expert in international finance.

    The yield on 10-year US treasury, a benchmark of return on US financial assets, has more than tripled from its trough seen in August to more than 1.6 percent as of Monday, according to market tracker Investing.com.

    Market mavens have attributed the phenomenon to investors foreseeing a brisk economic recovery in the US and global reflations.

    The rise in US treasury yields may have weakened the comparative appeal of Chinese financial assets and slowed capital inflows into the A-share market, said Zhang Liqing, director of the Beijing-based Center for International Finance Studies, which is part of the Central University of Finance and Economics, and a chief economist of PwC China.

    "But I don't think the trend of net capital inflows into China will reverse to net outflows."

    This is partly because the China-US yield spread, as represented by the difference between the 10-year Chinese treasury bond and its US counterpart, remains relatively high at about 1.6 percentage points, compared with about 2.5 percentage points at the beginning of August. This will continue to attract global investors, he said.

    China's A-share market retreated recently amid higher US yields and slower foreign inflow. The benchmark CSI 300 index dropped 14.7 percent from its recent peak on Feb 18 to Monday's close at 5057.15 points.

    On March 8, the index posted its biggest daily loss of 3.47 percent since late July, while net capital outflow via stock connects with Hong Kong came in at 8.59 billion yuan ($1.32 billion), the highest level in the past year, according to market tracker Wind Info.

    "But the A-share correction is mainly attributable to domestic factors, especially that some shares in the consumer and pharmaceutical sectors have become overvalued," Zhang said.

    Looking ahead, US yields may further rise, but it remains to be seen whether the A-share market will continue to feel the pressure of slower foreign inflows, he said.

    The pressure will abate if yields on Chinese treasuries also rise and keep the China-US yield spread relatively stable, and if China posts a strong economic rebound.

    "The Chinese economy is likely to achieve an annual growth of 8 percent or more this year, versus 2.3 percent in 2020, given a low comparison base and effective domestic containment of COVID-19," he said.

    Investment should be the top growth engine for China this year, Zhang said.

    "As the nation embarks on the 14th Five-Year Plan (2021-25), investments in areas such as 'new infrastructure', new urbanization, and carbon emissions reduction will speed up accordingly."

    In addition, exports are expected to pose robust growth this year as well, Zhang said.

    If the pandemic is brought under control worldwide, stoking a recovery in global demand, China's exports will boom, given the global supply chain's dependence on China's products, despite that some orders in labor-intensive industries may shift to Southeast Asian economies, he said.

    If not, demand for protective and medical goods will continue to drive China's exports, Zhang said.

    "China's economy has become more resilient against external shocks, as demonstrated by the country's steady economic performance in the COVID-19-ravaged 2020."

    Amid the increasing exposure to risks brought by capital inflows and outflows, China's resilient economy has also helped create more favorable conditions to further open its financial borders, he said.

    Yet, China's economic prospects still face several risks, including external ones surrounding the pandemic, a possible rate hike by the US Federal Reserve ahead of schedule, and China-US trade tensions, Zhang said.

    Domestically, consumption growth may pick up but still faces downward pressure from fluctuating incomes and people's tendency to save more amid uncertainties, he said.

    It is important for China to break the bottlenecks crimping domestic consumption and deepen reform and opening-up to boost technological innovation and productivity, ensuring healthy economic development in the long run, Zhang said.

    Top
    BACK TO THE TOP
    English
    Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
    License for publishing multimedia online 0108263

    Registration Number: 130349
    FOLLOW US
    CLOSE
     
    久久精品无码一区二区三区| 日韩精品无码免费专区午夜 | 91精品无码久久久久久五月天| 亚洲VA中文字幕无码一二三区| 无码伊人66久久大杳蕉网站谷歌 | 亚洲综合日韩中文字幕v在线| 97性无码区免费| 亚洲成av人片在线观看无码不卡| 无码中文人妻视频2019| 国产综合无码一区二区三区| 亚洲VA成无码人在线观看天堂| 中文字幕在线观看| 亚洲午夜无码片在线观看影院猛| 日韩爆乳一区二区无码| 一本加勒比hezyo无码专区| 日本aⅴ精品中文字幕| 少妇极品熟妇人妻无码| 伊人久久精品无码av一区| 一本大道香蕉中文日本不卡高清二区| 无码av不卡一区二区三区| 日韩乱码人妻无码中文字幕久久| 人妻无码αv中文字幕久久琪琪布| 无码精品A∨在线观看中文| 高清无码中文字幕在线观看视频 | 少妇中文字幕乱码亚洲影视| 蜜臀AV无码国产精品色午夜麻豆| 国产精品无码久久久久久| 无码国产69精品久久久久网站| 亚洲精品高清无码视频| 在人线AV无码免费高潮喷水| 免费无码一区二区三区蜜桃| 久久无码AV中文出轨人妻| 免费A级毛片无码A∨免费| 在人线AV无码免费高潮喷水| 亚洲啪啪AV无码片| 亚洲精品无码乱码成人| 亚洲级αV无码毛片久久精品| 无码精品久久久久久人妻中字| 日韩AV片无码一区二区不卡电影| 欧洲人妻丰满av无码久久不卡 | 人妻无码一区二区不卡无码av|