The authors examine how China’s opening credit and equity markets could reshape global portfolios by making balanced Chinese allocations more accessible. With foreign access rising from about 10% in 2015 to nearly 80%, they argue China’s distinct economic cycle may offer meaningful diversification
The Opening of Chinese Credit Markets Means That Foreign Investors Can Build a Balanced Portfolio in China; This Will Be a Big Deal
Bridgewater
Greg Jensen, Paul Podolsky
Article
1 Pages
Key Takeaways
Market Access Expands: Roughly 80% of Chinese capital markets, representing about $13 trillion, had become accessible to foreign investors, compared with only about 10% in 2015.
Foreign Holdings Could Rise: Greater benchmark inclusion could eventually increase foreign holdings of Chinese assets by nearly $2 trillion as global portfolios adjust to China’s growing accessibility
Different Economic Cycle: Developed world debt exceeded 300% of GDP with growth below 5%, while China’s differing conditions supported the authors’ case for diversification across economic environments.
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