Despite rising global market uncertainties, Chinese assets are increasingly attracting the attention of international capital.

SINA Corp reported that the "2026 Exchange International Training Course and Eurasian Capital Market Exchange Event" was held in Shanghai on June 8. At the event, the Chairman of the Federation of Euro-Asian Stock Exchanges (FEAS) stated that China's capital market fully demonstrates remarkable innovation capability, development resilience, and long-term vision.

According to Zhu Feng, Chief China Economist and Head of Greater China Economic Research at J.P. Morgan, China's economic resilience stems primarily from two pillars: strong shock absorption capacity in the energy sector and a solid manufacturing foundation.

"Over the next 3 to 5 years, a growing number of international investors will participate in China's capital market to share in the fruits of its rapid industrial development," said Gan Tian, General Manager of ChinaAMC (HK). Chen Sijie, Senior Audit Partner for Financial Technology at KPMG China, advised investors from the Eurasian region to carefully study the "15th Five-Year Plan," noting that China already leads in many technologies. He suggested that if the right sectors and companies are selected, the Chinese capital market is a worthwhile investment.

Navigating Global Economic Challenges and Opportunities

Despite multiple intertwined external risks, the Chinese economy continues to show resilience, with ongoing efforts to open up its capital market and advance international cooperation.

A relevant official from the Shanghai Stock Exchange International Exchange and Cooperation Center stated, "China's capital market has long focused on building a multi-layered market and serving domestic and international investment and financing needs. International exchanges and cooperation among exchanges can achieve common development and prosperity for capital markets across countries."

An official from the Shanghai Municipal Financial Regulatory Bureau also noted that the development of Shanghai as an international financial center and its capital market relies on the deep participation of international markets and investors. They expressed hope that the International Exchange Center would continue leveraging its strengths, deepen exchanges and collaboration with global capital markets, and contribute to building Shanghai into an international financial center.

Overseas exchanges also have a need for cooperation with Chinese exchanges. Leong Sze Ming, Director of Markets at Bursa Malaysia, mentioned in an interview that the Securities Commission Malaysia's recently launched "Capital Market Masterplan 2026-2030" aims for a capital market size of RM 5.8 to 6.3 trillion by 2030. To achieve this goal, the first initiative launched was signing a Memorandum of Understanding (MOU) with the Hong Kong Exchanges and Clearing Limited (HKEX), focusing on promoting potential cross-listings of companies and securities (such as ETFs) as a growth pillar. If other major Chinese stock exchanges could jointly participate, it would synergistically leverage the fourth pillar to focus on regionalization and international opportunities.

Behind the deepening exchanges and cooperation between domestic and international capital markets, the economic development trend remains a key focus.

Zhu Feng pointed out that the current global landscape has undergone tremendous changes compared to one or two decades ago, with China and Europe both situated within this wave of major transformation. The world currently faces challenges such as energy shocks, trade tariff barriers, and controls and restrictions in technology and critical minerals.

Regarding the European economy, Philippe Laurensy, CEO of Euroclear Asia Pacific, anticipates that European economic growth will remain moderate while inflation rises again. "We see strong divergent views across regions and asset classes. Fixed income has become more attractive. Europe may not be the place with the most opportunities; most emerging markets offer more," he said.

Looking at the Asian economy, Laurensy stated, "Asia remains the fastest-growing region, and we believe it is entering a stage of liquidity support." He expects rotation among Asian countries, with demographic factors being crucial, leading to more diversified markets. Exports will increasingly flow to Asian countries, with exports to China being particularly critical, resulting in both winners and losers. Many crises are actually opportunities; the key lies in having market infrastructure that supports daily operations and attracts more capital.

For the Chinese economy, Zhu Feng noted that China's economy started the year showing resilience, with first-quarter GDP growing 5% year-on-year, 0.5 percentage points faster than the fourth quarter of the previous year. This resilience primarily comes from the two pillars mentioned: strong shock absorption in energy and a solid manufacturing base. However, domestic economic weaknesses persist, including sluggish recovery in domestic demand and a prolonged downturn in the real estate market—an issue that has also existed long-term in economies like Japan, with a lengthy resolution cycle making a complete turnaround difficult in the short term.

Overall, Zhu Feng said, "The global economy's ability to maintain resilience is inseparable from the new growth cycle driven by cutting-edge technology industries like artificial intelligence. The vigorous development of the digital economy and smart industries provides support for global markets, including China and Europe. But risks are also prominent. If the energy crisis persists or key shipping channels are obstructed, international oil prices will remain high, continuously dragging on the global economy."

Chinese Assets Present an Allocation Opportunity

Amid numerous uncertainties in the global macro environment, what is the willingness of foreign capital to allocate to Chinese assets?

"Over the next 3 to 5 years, the Renminbi will undergo a process of stable appreciation, presenting a very good allocation opportunity for global investors in Renminbi assets," analyzed Gan Tian. Starting last year, the Renminbi reversed its depreciation trend of recent years. Especially since the Middle East conflict this year, while the US Dollar Index rebounded and many emerging market currencies depreciated, with Japanese and Korean currencies facing significant devaluation risks, the Renminbi has shown strong resilience. In the medium to long-term process of de-dollarization, once global investors start diversifying risks, they will inevitably focus first on currency exchange rate changes before considering other variables.

From a secondary market perspective, stocks related to new quality productive forces, the AI industry chain, and high-end manufacturing have performed well in the A-share market. Gan Tian expressed optimism about the overall performance of the A-share market over the next 2 to 3 years.

What is the primary source of long-term confidence for international investors investing in the A-share market? According to Yu Bingguang, Senior Partner at AllBright Law Offices, it mainly stems from stability. Amid global geopolitical conflicts and other unstable factors, capital seeks an ideal safe haven. China provides investors with a relatively stable investment environment in terms of both asset security and the economy.

Besides direct stock investment, ETFs are also a primary channel for investors to allocate to Chinese assets. So, what overall development trend is the current ETF market showing?

According to Gan Tian's observations, in recent years under the trend of globalization, an increasing number of institutional and individual investors are using ETFs to invest in various sectors. From the perspective of the Hong Kong market, overseas investors are far from satisfied with just investing in broad-based indices. Through the ETF Connect program, global investors can participate in the growth of Chinese companies and sectors via Hong Kong, such as products tracking the STAR 100 Index, and indices related to emerging technology and future industries like semiconductors, low-altitude economy, and aerospace.

Regarding the trend of interconnection between China's capital market and overseas markets, Yu Bingguang analyzed from two aspects: First, horizontally—in terms of geographical breadth, while deepening interconnection with some core economic markets in Europe and Asia, expanding to more emerging markets such as the Middle East, Southeast Asia, and South America (e.g., Brazil). Second, vertically—in terms of product depth, moving beyond the previous reliance on equity products to further expand into bonds, ETFs, derivatives, and other areas.

Enhancing the Technology Ecosystem

The competitiveness of Chinese assets also depends on the quality of listed companies. In recent years, an increasing number of technology innovation companies have listed on the A-share and Hong Kong stock markets, showing an accelerating trend.

Chen Sijie stated that among the companies KPMG is currently assisting with listings, areas involve autonomous driving, AI-assisted precision medicine, and fintech. He observed two major difficulties these companies face during the listing process: First, technology innovation companies, while conducting business or investing heavily in R&D, often lack foresight in financial management and internal control design, leading to significant time and effort required for improvement during the listing process. Second, the regulatory trend for A-share and Hong Kong IPOs is "wide entry, strict process." Companies encounter various issues during the application process, such as supplementing compliance materials and responding to inquiries, mainly concerning revenue recognition, R&D expense allocation and calculation, and tax compliance.

In response, Chen Sijie offered two suggestions: First, invite professional intermediaries to intervene early and establish infrastructure like financial standardization. Second, establish a series of institutional systems early on for the verification of R&D expenses, including internal R&D systems, R&D expense allocation norms, R&D evaluation and control, and multi-caliber R&D expense differences. These are issues that prospective listed companies need to pay attention to and areas where intermediaries can play a role.

Regarding how China can further improve its financial and technology ecosystems to continuously enhance its attractiveness to international capital?

Chen Sijie believes that the activity level of cross-border investment and financing is a core indicator for measuring an economy's appeal to international capital, involving many factors including financial infrastructure, market openness, legal system development, and public governance levels.

From the perspective of financial infrastructure, what types of assets are suitable for outward expansion and layout? According to Chen Sijie's observations, the cross-border application of the digital Renminbi is gradually expanding. As a core cross-border payment and settlement system, the Cross-border Interbank Payment System (CIPS) is continuously optimized and upgraded, now gradually being adopted by financial institutions in multiple countries and regions worldwide, which will significantly facilitate the outward transfer of patented technology and intellectual property. Furthermore, the two major fields of green finance and digital finance will also play important roles in the process of companies attracting international capital.

"Overall, improving China's financial and technology ecosystems and enhancing international competitiveness requires simultaneous efforts across various dimensions including payments, rules, public services, and new business formats," Chen Sijie said.