HONG KONG, July 14 (Reuters) – China’s financial regulators have invited some of the world’s biggest investors to a rare symposium next week, three sources said, to encourage foreigners to keep investing in the world’s second-largest economy despite recent weakness and weakness increasing geopolitical tensions.
Next Friday’s meeting in Beijing will focus on the current situation of US dollar-denominated investment firms in China and the main issues and challenges they face, according to sources with direct knowledge of the matter and invitation documents verified by Reuters feature.
The meeting comes at a time when global investors and banks are warning that confidence in China’s economic prospects is fading. The post-pandemic recovery is rapidly losing momentum and Sino-US relations are at a low ebb over national security issues – including Taiwan, US export bans on advanced technologies and China’s state-guided industrial policies.
Such a meeting, with a clear agenda to discuss the challenges faced by global fund managers investing in China, is rare, the three sources said, reflecting Beijing’s drive to boost foreign investor confidence.
Large foreign and domestic fund managers such as private equity (PE) firms known as general partners (GPs) and their investors or limited partners (LPs) including sovereign wealth funds and pension funds are expected to attend the meeting, the sources said .
According to the sources and documents, they are also encouraged to make suggestions on how to address the challenges their companies are facing in China and to share their outlook on the economy.
The participating global funds are likely to send their China-based executives, the sources added.
All three sources spoke on condition of anonymity as they were not authorized to speak to the media.
Under the strain of strict COVID measures, China’s economy grew just 3% in 2022, one of its worst numbers in decades. The situation rebounded after restrictions were abruptly lifted earlier in the year, but momentum has since slowed sharply, while political uncertainty and tensions between China, the US and other Western powers have increased.
The meeting also comes at a time when some PE firms and their investors are rethinking their China strategies after years of cracking down on private companies such as tech companies, casting a long shadow over the prospects for returns for PE investors and the limited investment opportunities. Various sources told Reuters.
Canada’s third-largest pension fund — the Ontario Teachers’ Pension Plan (OTPP) — announced in January that it would pause future direct investments in private wealth in China.
According to two sources, Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), the country’s securities regulator, will address the attendees.
The CSRC did not immediately respond to Reuters inquiries on Friday.
The meeting is organized by the Chinese fund regulator Asset Management Association of China (AMAC). AMAC did not immediately respond to Reuters’ questions.
Months of disappointing economic data have seen MSCI’s China stock index fall 2% year-on-year, while world stocks are up 15%, while the yuan remains at 8-month lows, urging some investors to shed their China abandon strategies.
Dollar-denominated fundraising by China-focused venture capital and PE firms this year also had its weakest first half in a decade, data from industry tracker Preqin showed.
China-focused GPs raised just $5.5 billion in U.S.-denominated funds in the first half of the year, Preqin data showed, a far cry from their peak of $27.6 billion in the same period of the year 2021
The symposium also follows signals from authorities last week that a crackdown on the tech sector that began in late 2020 has resulted in fines for Ant Group and Tencent.
In another strong signal that the crackdown is over, Premier Li Qiang on Wednesday met with firms like Alibaba’s cloud unit and Meituan, urging them to do more to support China’s economy.
Reporting by Xie Yu and Julie Zhu; Additional Reporting by Selena Li; Edited by Kim Coghill
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