China An economic powerhouse

China’s the 21st century’s economic success story. It’s one of the biggest cogs keeping the wheels of the global economy turning; if the Chinese economy sneezes, the world catches a cold. Given its significance, it’s more important than ever to have China on your watchlist. Even if the country doesn’t feature in your portfolio, its economy will impact your investments.

Will China become the world’s biggest superpower?

share

The two gigantic economies in the global economy will be China and India.

A. Michael Spence

Nobel Laureate in Economic Sciences in our Nobel Perspectives series

UBS has had a presence in China since 1989. We were the first international wealth manager to receive a private fund manager’s license in its onshore market, and we maintain a strong commitment to the country, with a pledge to double our employee base in China by 2020. Our expertise can help our clients access the not-to-be-missed opportunities in this exciting and rapidly developing economy.

China: The facts

  • Since the 1970s, China’s economy has grown at a rate of up to 10% a year
  • In the first half of this year, China’s GDP was 6.9% higher than it was at the same time in 2016
  • China’s economy is bigger than that of both Germany and Japan. It could soon overtake the USA
  • China produces five times more STEM (science, technology, engineering and math) graduates than the USA
  • Its predicted spend on R&D (research and development) will surpass the USA’s by 2018

Sources:

Stepping up the pace

China has shifted from a ‘me too’ economy, producing things designed elsewhere to a world leader in research and innovation. Its strategic importance has inspired our series of articles in partnership with the Wall Street Journal, where we explore how the country’s changing the game in fields such as healthcare, manufacturing and pollution control.

For example, iCarbonX is a healthcare company looking to the 22nd century. Its ‘Meum’ app aims to use algorithms to analyze genetic, biological and other data to create personalized health plans for its users. It’s already attracted more than $600m in investments and is symbolic of the new, innovative China.

UBS in China

With 30 years’ experience in China, UBS understands its economy, cultural norms and values. Our investment bank business in China consistently ranks top among international investment banks while, in 2015, our Chinese asset management division was the first foreign asset manager to receive a qualified domestic limited partnership, allowing it to raise funds from Chinese investors to invest overseas. So, whether your interest is personal or corporate, we can help you reach your goals.

The Nobel perspective

At Nobel Perspectives Live!, held in Singapore in August, four Nobel Laureates and 1,000 students debated the issues affecting the world’s future. China was a hot topic, and all the laureates agreed that China’s going to have a huge impact on all of our futures.

How China’s political system has impacted on its growth.

share

Since its economic revolution in the 1970s, China has lifted 500,000 citizens out of poverty. As Nobel Laureate Sir James Mirrlees notes in our Nobel Perspectives series, the country was able to do this as it had so many people working in both agriculture and textiles, both of which attracted capital investment. Every adult male living in a village was allocated an equal tract of the village’s land, ensuring every family had something they could cultivate. This raised local wage rates, allowing citizens to buy more, which boosted the economy as a whole.

At the 19th National Congress of the Communist Party of China, Party General Secretary and Chinese President, Xi Jinping, looked to the future. He committed to transforming the country into one of innovators. There were also nods to increasing foreign firms’ access to the country’s market, along with stronger regulation of banks and other finance providers. He also reinforced his commitment to China’s current, one-party political system.

Investing in China

share

China’s still an unknown quantity to many investors and is underrepresented in their portfolios. It has the world’s second-largest equity market, and third-largest bond market, yet it currently constitutes only 2.5 percent of the MSCI All-Country World Index. Find out more about the Chinese market, and about our investment strategy for China with UBS House View.

See how UBS can help

Find out more about investing with impact.

Or ask us directly