Portfolio Investment Opportunities in China

by David M. Darst

Overview

Essential research on the Chinese economy for investors and asset managers

In this handy new e-book, bestselling author David M. Darst provides the latest information on investment opportunities in China's growing economy. Constraints of language and time zones, geographical distance, foreign currency transaction costs, and political and cultural factors can make it difficult to assess, value, and invest in China's economy. Portfolio Investment Opportunities in China gives investors the information they need to make intelligent choices, including coverage of Chinese history, politics, and culture—all with an eye towards helping investors pinpoint those businesses and industries that offer the best potential returns.

• Covers key factors western investors need to know about China, with specific focus on China’s economy, investment landscape, and financial potential
• Written by David M. Darst, CFA, the bestselling author of The Little Book That Saves Your Assets
• Covers key factors western investors need to know about China, with specific focus on China's economy, investment landscape, and financial potential

Product Details

ISBN-13:	9781118502969
Publisher:	Wiley
Publication date:	07/17/2013
Series:	Wiley RealTime Finance
Sold by:	JOHN WILEY & SONS
Format:	eBook
Pages:	172
File size:	4 MB

About the Author

David M. Darst (New York, NY) is a Managing Director of Morgan Stanley and chairs the firm's Global Wealth Management Asset Allocation and Investment Policy Committee. He serves as Chief Investment Strategist of the Global Wealth Management Group, with responsibility for Asset Allocation and Investment Strategy, and was the founding President of the Morgan Stanley Investment Group. Mr. Darst joined Morgan Stanley in 1996, after more than 20 years with Goldman Sachs, where he served as a senior executive in the Equities Division. Previous responsibilities with Goldman included serving as Resident Manager of their private bank in Zurich. Darst is the author of four books: The Complete Bond Book, The Handbook of Bond and Money Markets, The Art of Asset Allocation, and Mastering the Art of Asset Allocation. He has also contributed numerous articles to Barron's, Euromoney, The Money Manager, and other publications. Darst is frequently quoted and regularly profiled in the business press including the New York Times, the Wall Street Journal, Reuters, Financial Times, among others. He is a frequent guest on CNBC, Bloomberg, and FOX News, and on radio shows. Darst earned his MBA from Harvard Business School and received a BA in Economics from Yale University, both of where he has served as a visiting faculty member. Darst also holds a CFA.

Table of Contents

About the Author ix

Introduction xi

1: China at a Glance 1

Getting to Know the Chinese Language 2

Confucianism, the Cornerstone of Traditional Chinese Culture 3

Religion in China 4

Overview of the Chinese Calendar 5

Historical Chinese Cities 7

The First Five Special Economic Zones of China 9

Other Notable Chinese Cities 11

China’s Five National Central Cities, Emerging Cities,

and Growing Middle Class 14

Transportation in China 16

Evolution of Modern Chinese Paper Currency 19

China’s Political System 19

Five-Year Plans of the People’s Republic of China 24

China and Rare Earth Elements 26

China’s Nuclear Energy Industry 27

China Investment Corporation 29

China’s Foreign Exchange Reserves 30

Foreign Direct Investment Flows 31

China’s Trade Activity with the United States 32

China’s Trade Activity with the World 34

2: Issues for Consideration 37

Investment Trends 39

Intermediate-Term Strengths and Hindrances in China 40

Potential Risks 41

Bullish Factors Affecting China’s Economy and Markets 42

Bearish Factors Affecting China’s Economy and Markets 45

China’s Economy in Context 49

Three Scenarios for the Chinese Economy through 2020 50

The China Landscape: Megatrends 53

The China Landscape: Megatransition 57

China: The Middle-Income Transition 58

China Nationally and Regionally Emulates Other Asian Nations 59

Chinese Affluent Consumer 61

China’s Consumption May Be Understated 63

Three Pillars Underpin Rising Chinese Consumption

through 2020 65

Labor Supply and Workforce Trends in China 66

Demographic Trends in China 67

Increasing Urbanization Rates in China 70

China’s Demand for Industrial Commodities 72

Business-to-Consumer (B2C) E-Commerce and

Growing Internet Usage in China 72

China and India: A Critical Global Relationship 73

China and India: Expanding Strengths 75

China as a Superpower 77

3: Investing Background 79

China and Greater Asia Economic Forecast 83

Chinese Initial Public Offering Activity 86

Overview of China-Related Equities 92

The MSCI China Index 100

China’s Treasury Bond Market 107

China’s Corporate Bond Market 107

Short-Term Interest Rates in China 109

4: Understanding China’s Investment Potential 111

Domestic Politics 112

The Economy 113

The Chinese Renminbi 115

Credit and Capital Markets 117

Geopolitics 117

China’s Maritime Positioning 118

China’s Property Market 120

Inflation and Deflation 123

Energy 126

Security 128

The Relationship between the United States and China 129

Other Issues 129

5: Overview of the Investment Landscape 137

Overview of Closed-End Funds with Exposure to

Greater China 138

Overview of Private Equity/Venture Capital in China:

From Nascent Beginnings to Burgeoning Present Times 139

Chinese A Shares 141

Chinese B Shares 142

Chinese H Shares 143

Chinese Red Chip Shares 144

Chinese P-Chip Shares 146

Select China-Related Equity Indexes 147

Select China-Related Equity Indexes 150

Overview of China ADRs 151

Overview of China Convertible Bonds 152

U.S., European, and Asian Corporations in China 152

6: Additional Sources and Disclosures 155

Select Web Sites 155

Books 155

Morgan Stanley Research Publications 158

Periodicals 160

Publications 164

Television Broadcasts 164

7: Glossary of Indexes 165

Acknowledgments 169