China remains attractive investment destination
Q3 China's economic policymakers have assured greater efforts to attract foreign capital, widen market access and ensure a level playing field for both domestic and foreign companies. In this context, what new policy measures do you expect from Chinese authorities in the near future?
KASSOW: China's economy is highly developed, while insurance penetration is relatively low compared to other markets. The economy and the values it produces are less protected against natural disasters, for example. Insurance can cover more of these risks. Raising the insurance penetration to an international level offers us growth opportunities and the possibility to support China's economic development.
China has already taken essential steps to develop insurance markets and open up the financial services sector. Further improved clarity on regulations and acceptance of global business models will provide a predictable and steady business environment for both domestic and foreign companies. In return, our Chinese clients can benefit from the advantages of Munich Re's global diversification and expertise.
LIU: Key challenges, which are indeed a symptom of the global economy, are uncertainty and lowered confidence. Investors and companies in different parts of the world continue to grapple with the challenges brought on in the post-pandemic era. In China, we need confidence to return from all participants across the business landscape, from investors to consumers, from private to foreign-invested enterprises. In my view, confidence comes from consistent policy expectations and transparency in every aspect of the economy. As a foreign bank operating in China, we are not necessarily focused on specific stimulus policies, but rather, we value and benefit from ongoing equal access to the market as our Chinese and foreign bank peers.
MAO: The government has demonstrated its commitment to financial market opening-up to allow overseas participants over the last decade, such as easing ownership restrictions for joint ventures and allowing WFOE and public fund licenses. Onshore investors now have more investment channels to diversify their investments, including QDII (qualified domestic institutional investor) and QDLP, the Greater Bay Area wealth connect scheme and pension reforms. The gradual capital market opening-up — from A-H shares and QFII (qualified foreign institutional investor) to Stock Connect and Bond Connect — offers better access for foreign asset managers and investors to develop their China portfolios.
As home to the world's second-largest equity and bond markets, China is pivotal to progress amid a surge in sustainable investing globally. Leading companies are not only disclosing ESG (environmental, social, and governance) data, but tying them to forward-looking targets with commentaries on how they plan to achieve them and what this means for their business. We believe more progress will be made nationwide, which is consistent with what we are seeing in other markets.
WATKINS: It may take time to fully restore the confidence of international investors and boost domestic consumption demand. We are confident that the strengthened policy support to stimulate the economy and measures to further liberalize the capital market to attract overseas investors will lead to improvements in the near term.
In my view, despite the market ebb, we should not lose sight of China's ever-expanding asset management industry, which is expected to double in size by the end of this decade. This could not be possible without the Chinese authorities' unceasing efforts to internationalize and widen industry access for global players. We believe that the increasing alignment with international practices will facilitate business operations of international institutions in China. In the long run, policy consistency and certainty will lend confidence to overseas investors.
