(China Alert) Outbound restrictions: Temporary but telling
- insurance, outbound, QDII
·Regulators continue to crack down on outbound programs
·Demand for offshore investment from firms and investors remains high
·This is a precursor to enhanced outbound investment platforms
Update: Differing reports about the level of outbound capital restrictions all radiate a negative view on China, not at all helped by recent volatility. However, they fail to acknowledge that short-term adjustments to China’s financial markets will ultimately lead to longer-term structural improvements. Z-Ben Advisors wants to set the record straight on what the restrictions are and, more importantly, how they underlie significant opportunities as early as 2H16. RMB dynamics have fundamentally changed in the last six months and mainland portfolios remain overexposed to domestic volatility. Chinese investors, most notably institutional and HNW, are scrambling to diversify their portfolios even as outbound gates close. Z-Ben Advisors believes this closure is temporary, but the need to diversify will remain. We have observed that the shrewdest firms haven’t pulled back in the slightest.
The best example of this is China’s insurance industry ……
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