(Yicai) Nov. 2 -- This is an opportune time for international investors to put money into China, according to the global head of multi-asset business at US asset manager PineBridge Investments.

“Many of the Western economies, such as the United States, are in an overheating position, as they have overstimulated and are overheating, overexposed, and overpriced,” Michael J. Kelly told Yicai in a recent interview.

China’s lockdown over the past three years resulted in a very slow period, Kelly said, adding that the country is coming out of this slow period now that Western countries are overheating.

“If I have to choose as an investor, I choose to invest in the economy that is trying to nurture growth, instead of those trying to restrain growth, and gradually adding to liquidity, instead of those trying to persistently dry liquidity,” he noted.

Covid-19 prevention and control measures were removed sooner than PineBridge thought, Kelly pointed out. In the same way, the government and technology platform did find an understanding earlier than expected, which led to some of them reporting better-than-expected earnings for the fourth quarter of last year, he continued.

China has massive savings, on the contrary of other countries, Kelly said. Now, the country needs means to channel these savings into the capital market, facilitating the stock market, he explained.

“We would like to see more policies to make it easier for companies to list equities,” Kelly said, noting that China’s stock market is still too small compared to the country’s economy. “A lot of growth has been financed over time with debts instead of with equities, so remixing the economy back toward more equities would be good for China,” he added.

“Too much of China’s growth has been property and infrastructure-related growth, and too much of that has happened with debts,” according to Kelly. “That has created a lot of growth, but the stock market in China hasn’t grown anywhere near the economy has grown.”

Kelly therefore suggested China shift to a less capital-intensive growth and more financing with equity. This would also raise the valuation of Chinese equities and reduce the risks underneath the Chinese financial system, he noted.

More industries like that of electric vehicles should become new economic growth drivers for China to switch from a property development model to another type of growth model to super-power the economy, Kelly explained. The EV industry is just beginning to ramp up now, so it can be a new economic growth driver in the future, but not now because exports are at the early stage, he added.

Editors: Dou Shicong, Futura Costaglione