Changing Gears: Uncovering the investment opportunities from China’s new era of sustainable growth
Articles & stories

Changing Gears: Uncovering the investment opportunities from China’s new era of sustainable growth

China has experienced an unprecedented transformation over the last 20 years, becoming a global economic powerhouse as well as a world leader in innovation, technology and manufacturing. But in the wake of greater global uncertainty, coupled with demographic shifts and the need to tackle climate change, China is switching gears to navigate the challenges ahead. As it charts a new path towards economic recovery and carves out a more prominent role on the world stage, China is embarking on ambitious plans to be carbon neutral by 2060 and leave no citizen behind in its continued pursuit of economic prosperity. 

Watch the trailer

A preview into the 12th Credit Suisse China Investment Conference

By accessing the videos and/or podcasts in this page, you hereby consent to Credit Suisse disclosing your full IP address to YouTube and/or SoundCloud for the purpose of enabling you to view or listen to the content hosted in those platforms. These third party platforms are not operated or monitored by Credit Suisse, and your IP address and any other personal data collected, processed or stored by these third party platforms will be subject to their own privacy policies, and Credit Suisse will not be responsible for their treatment of personal data.

Bringing together the most influential experts from the political, business and academic spheres, the 12th Credit Suisse China Investment Conference (CIC) 2021, taking place from November 1-5, 2021, will shed light on the changing face of China and the impact of new reforms on its economy, global trading relationships and key industries, and highlight the opportunities for investors.

Global economic outlook and the path to recovery

Despite continued uncertainty, the global economy is expected to deliver a return of 5.9% GDP growth in 2021. China is among the top performers with a 8.1% growth. As the world’s second largest economy and a key player in the global supply chain, China’s economic trajectory and its relationship with the US are among the most critical factors for investors as they consider the global outlook.

Helping investors at CIC 2021 gauge what comes next is Yiping Huang, Peking University professor and member of the distinguished Chinese Economists 50 Forum, a think tank for China’s policy makers,  who will provide insight into China’s 2022 economic outlook. Meanwhile, Jisi Wang, President of the Institute of International and Strategic Studies and a fellow Peking University professor, will discuss the future of China-US relations and opportunities for the two superpowers to work towards shared interests such as climate change and public health. 

And with governments and central banks around the world increasingly adopting unconventional monetary and fiscal policies to resolve domestic issues such as high unemployment and property prices, Ben Bernanke, Former Chair of the US Federal Reserve, and current Distinguished Fellow at the Brookings Institution, will help investors understand the implications of these measures on the global economy during a keynote conversation.

Forecast GDP and inflation

Source: Credit Suisse estimates
*Last forecast update 15/10/2021
1. "Current" central bank rate refers to the mid-point of the target range for the policy rate.
2. Central bank rate refers to the ECB's deposit rate.

Evolving demographics and the new Chinese consumer

While the economic outlook provides insight into near-term growth, China’s shifting demographics – an aging population and decreasing birth rate – are set to bring about mid- to long-term structural changes to Chinese society with consequences across the economy.

For instance, high education costs is the top contributor to China’s falling fertility rate, more so than home prices, according to research from Credit Suisse’s China Quantitative Insight (CQi) team. In response, China has recently announced reforms to the US$100 billion after school tutoring (AST) industry to promote educational equity and reduce the burden on students and parents alike. Dongping Yang, President of the 21st Century Education Research lnstitute and Member of the National Education Advisory Committee, will discuss where China's education reform is headed following the ‘double reduction’ policy, and the implications for the future. 

Demographic changes are also leading to a rise in demand for healthcare services and technology. David Murphy, Head of CQi at Credit Suisse, will be on hand to provide a detailed analysis and explanation of what China’s changing consumption patterns mean for major industries, while James Liang, a renowned population economist and Peking University professor, will weigh in on how China can escape the low fertility trap. 

And bringing her unique perspective on the key trends that have been accelerated by the COVID-19 pandemic and what these mean for investors is Rachel Lord, Chair and Head of Asia Pacific at BlackRock. 

Investment themes and implications for investors

Source: Credit Suisse estimates

Common prosperity and a new era for platform companies 

In addition to targeted policies to reverse declining population growth, China’s decision to implement wider regulatory changes to achieve its goal of ‘common prosperity’ is reshaping the country’s corporate landscape. 

One of the most high-profile reforms has been the increased oversight of platform companies to promote healthy competition and sustainable growth.  While the level of the anti-monopoly enforcement measures may return to normal next year, Credit Suisse forecasts that investors should expect an increase in data security and privacy-related regulations. Discussing the impact of the new regulatory regime will be Yunjia Law Group’s deputy director, Zhanling Zhao, while Tsinghua University professor Ping Xie will explore what’s next now that the days of robust growth are gone for China’s fintech firms. 

Net zero and the growth of green finance

As China works towards rebalancing its social and economic policies, it is also taking bold steps to address environmental challenges, including pledging to be carbon neutral by 2060.

China has already made great strides – such as delivering a significant shift from fossil fuels to renewable energy which saw it account for 37% of total global renewable capacity in 2020, and launching a carbon trading market earlier this year. 

China's renewable capacity as a percentage of world

Source: BP Statistical Review of World Energy

However, China retains its position as the world’s largest greenhouse gas emitter,  and efforts to further cut carbon emissions will have far-reaching impact, as well as presenting new investment opportunities. Discussing China’s strategy for meeting its 2060 net zero target, and the new sources of power that will drive future energy development is Lin Xu, Chairman of the China-U.S. Green Fund.

Furthermore, with an estimate of more than RMB100 trillion of investment required for China to realize its long-term goal of carbon neutrality, Jun Ma, Founder and President of the lnstitute of Finance and Sustainability, will provide an in-depth overview on how green finance will become an indispensable tool to deliver China’s sustainability ambitions.

China's green finance scheme

Source: PBoC

At the same time, as demand for Environmental, Social and Governance (ESG)-aligned portfolios grows, Chinese companies will increasingly become part of the investment mix as exchanges in China and Hong Kong move to align their reporting requirements with international best practices. Explaining what this means for investors and how the wealth of ESG data can be incorporated into portfolios will be Amanda Yap, ESG Vice President at Fullerton Fund Management, and Kristy Wong, ESG Investment Specialist at Amundi, in discussion with Phineas Glover, Head of ESG Securities Research, Asia Pacific at Credit Suisse. Meanwhile, Nicolas Aguzin, CEO of Hong Kong Exchanges and Clearing Limited (HKEX), will share his views on the future of global exchanges and how they can help to promote issues that support China’s drive towards sustainable economic prosperity.

China is changing gears as it responds to the shifting needs of its economy, people, and the world around it. We look forward to welcoming you to the 12th Credit Suisse China Investment Conference 2021 as we discuss what the road ahead may bring and the unique investment opportunities for investors.