Urs shares the current outlook for emerging markets, the key strengths of the team, and importantly how this benefits our investors. More
Stepping up a free-trade agenda
That is because China has stepped up its trade agenda and signed free trade deals to give its companies access to overseas markets. China has concluded 17 global free-trade agreements (FTAs), negotiated another 14, and targeted another nine deals1.
Most notably, the Regional Comprehensive Economic Partnership is in the final stages. This deal establishes a free-trade bloc of 16 Asian countries, including China, India, Singapore, Indonesia, and Vietnam, at a time when the IMF projects the region will grow 6%+ annually in 2019 and 20202.
Ramping up overseas investment
And Chinese companies are positioning, investing USD 109.5 billion in 195 overseas greenfield projects during the past ten years3. At the same time, China’s Belt and Road initiative has ramped up and put an estimated USD 382.8 billion into new ports, rail links and road infrastructure at the end of 20174.
Recent greenfield investments and projected growth in middle class and populations by region
Positioning for future global growth
And Chinese companies’ overseas investments are highly strategic and targeted in global markets that are expected to see the largest growth in population and middle class over the next 12 years.
Long-term prospects look strong
Opening up new markets, establishing overseas capacity and linking with hard infrastructure, will reorient China’s trade model for the 21st Century, and that is an important consideration at a time when trade concerns dominate newsflow and adds further weight to our conviction that finding the right companies leading these trends will give investors long-term strategic positioning as China’s growth story continues.
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