(Yicai Global) Jan. 3 -- Overseas investors should conduct long-term and strategic asset allocation in China as improved access to the country's capital markets presents unprecedented opportunities, the world's largest asset manager BlackRock said on its WeChat account, citing one of its senior researchers.
The Chinese capital market is not only large and has strong liquidity but is also not closely linked to other global assets, Ben Powell, chief investment strategist for the Asia-Pacific region at the BlackRock Investment Institute, said yesterday.
More than half of the world's economic growth was in Asia last year and about a third of that was from China, Powell said. The country's economic growth has slowed in recent years, but the size of the expansion is still considerable and China will maintain high-quality growth.
Beijing is making great efforts to meet its goal of doubling gross domestic product between 2010 and 2020, so this year will be important, Powell said. The government will continue prudent policies and will not turn to large-scale monetary stimulation or credit loans.
As times goes by, prudent interest rate policies will direct capital flows to companies with higher sustainable profit margins and returns to promote a rebalancing of capital flows, which will be of great benefit to private enterprises, he added.
Investors must continue to pay attention to China's growing elderly and retired population and the rise of the pensions sector, Powell said. Pensions will become an important and long-term market focus, and in the next few years the domestic macro environment will favor companies that provide health care services to the elderly.
Global economic growth is expected to pick up slightly this year, Powell said.
The main central banks, and the US Federal Reserve in particular, are unlikely to hike interest rates. A quickening pace of economic growth and loose monetary policies will be positive for risk assets, so BlackRock has a moderate preference for risk this year.
Editor: Kim Taylor