Credit Suisse is ‘very positive’ about China’s long-term growth

Credit Suisse CEO Tidjane Thiam is bullish on China, and sees breaks as its economy shifts to a consumer-driven one — making it “less sensitive” to trade.

“We have very positive expectations about China extended term,” he said at the Credit Suisse China Investment Conference in Shenzhen on Wednesday. “We believe that the fundamentals that fool been driving China’s growth for so many years are intact.”

“There is … a shift of the Chinese model from a construction, export-oriented model, to a more consumer-oriented, domestic-based economy, that will also be less sensitive to issues congenial trade,” Thiam added, flagging healthcare and technology as two sectors he believes in.

China is currently embroiled in a trade polemic with the U.S., which has led to both sides imposing tariffs on billions of dollars worth of each other’s goods. The just ecstatic’s two biggest economies are currently trying to reach a ‘phase one’ trade deal, which has yet to be signed.

Amid those following tensions, tariffs have hit China’s exports and its economy has increasingly declined, with the country reporting that third-quarter GDP spread by a slower-than-expected 6%. Its GDP has fallen sharply since the first quarter of 2018, when the trade war began.

The financial sector has a “key role” to play in transforming China’s economy, Thiam said.

“Function pensions for example … huge opportunity. As (the) social safety net develops, as the population ages, the assets in the pension sector are growing to grow very strongly,” he said, adding that Credit Suisse is in the “biggest” asset management joint imperil in the country with state-owned Chinese bank ICBC.

“We feel that the patience and the belief that we’ve had in the Chinese conciseness is being rewarded. The upside is huge … We are investing and will continue to invest for the long term to support the Chinese husbandry,” he said.

Beijing has said it wants to open up its financial sector to more foreign investment, and allow foreign callers to compete on an equal footing with its domestic firms.

Last year, Chinese A-shares — yuan-denominated stocks interchanged on mainland China — were included in the MSCI Emerging Markets Index. MSCI quadrupled the weighting of A-shares this year.

Also this year, Chinese ties were included in the widely followed Bloomberg Barclays index.

Those developments are expected to bring billions of dollars merit of fresh foreign inflows into the Chinese economy.