Since October 2018, emerging markets have once again gained favor from international capital.
In this context, the MSCI expansion of A shares and the inclusion of A shares into the FTSE Em
erging Markets Index will likely happen in 2019, with foreign investment attracted by such major international o
pportunities. Latest data showed that in the fourth quarter of 2018, net inflow of direct investment by overseas financial ins
titutions soared to $2.14 billion, marking the highest level since the third quarter of 2015. Thanks to the overseas investment inflow, China’s capital ou
tflow pressure is expected to continue to be eased in 2019, thus reducing the restraint on its monetary policy.
Third, the yuan’s exchange rate continued to return to its normal valuation. In the long
run, the yuan’s rate reflects changes in China’s economic fundamentals, with two-way fluctuations surrounding its eq
uilibrium exchange rate. In the third quarter of 2018, the effective exchange rate of the yuan was greatly lower than the equilibrium rate. I
n the fourth quarter, the yuan’s rate rebounded slightly, indicating the effective exchange rate had started to r
eturn to its equilibrium level. Due to the still existing gap between the effective rate and equilibrium rate, there is room
for the yuan’s rate to return to its valuation, conducive to further buffering of the external exchange rate risk.
China’s economic slowdown is a fact. Some foreign companies are said to be considering a withdrawal from the Chinese market, while others are making the choice to stay.
Nobody can say that all foreign companies can succeed amid the nation’s economic restructuring, but it’s very lik
ely that the ones who remain calm can emerge as winners in the market of more than 1.3 billion consumers.
China’s economic slowdown is making headlines around the world with signs of weakening growth agains
t the background of trade tensions. Several Western media outlets in recent weeks have published articles suggesting Ch
ina’s slowdown has started to weigh on some of the world’s biggest businesses, spreading alarm in the market.
The sales of a number of big companies are reportedly suffering as a result of China’s economic slowd
own. Those reports have led many to believe that those companies are losing confidence ab
out the Chinese economy. Some companies have plans to withdraw from China. However, investors may be misled by those reports. Official figures show t
hat inbound foreign investment in China reached an all-time high in 2018, reflecting overseas investors’ growing confidence in the Chinese market.
China is having a hard time amid its economic restructuring. In fairness, most of the world econo
my is suffering. Still, the Chinese economy has turned in a relatively good performance with GDP growth of more than 6 percent.
its poor performance in recent polls in three key Indian states.
One key factor that apparently sealed the fate of the BJP was prevailing anger among upper castes. So the first thing the prime
minister did was to grant 10 percent job reservation to the less well-off among the upper castes.
The BJP projected the move as a “game changer” which it claimed would win it the support of a certain section of society bu
t now finds itself on the back foot as the Congress came out with a proposal promising “minimum income guarantee” fo
r every poor villager if the party was voted to power. The idea has left the BJP leadership unnerved.
The head of the Pakistan Navy hailed the Chinese navy’s participation in the Aman 19 multinational maritime exercise during a visit to the
warship Kunlunshan on Sunday, saying that the Chinese naval presence in the Indian Ocean is vital to regional security.
Pakistan is holding its sixth multinational maritime naval drills, Aman 19, from Friday to Tuesday in Ka
rachi, with navies and observers from 46 countries including China, Russia and the US participating in the exercise.
The Chinese People’s Liberation Army Navy (PLA Navy), which has participated in all
previous Aman exercises, sent two warships from the Task Group 998 for the exercise.
“The PLA Navy has always been a very big participant, we are really grateful for that,” Ch
ief of the Pakistani Naval Staff Admiral Zafar Mahmood Abbasi told the Global Times during his visit.