"The Central Financial Work Conference pointed out that efforts should be made to build modern financial institutions and market systems, unblock channels for funds to enter the real economy, and accelerate the construction of a financial power and promote high-quality development of China's finance. We believe that this conference reflects China's emphasis on developing international competitiveness in finance and capital markets, and once again emphasizes the fundamental positioning of the financial industry serving the real economy." Fan Xiang, co head of Goldman Sachs China and chairman of Goldman Sachs (China) Securities Co., Ltd., said in a recent interview with China Securities News.
Fan Xiang stated that Goldman Sachs is full of confidence in the medium and long-term development prospects of the Chinese economy. Both in terms of scale and importance, China is a driving force for the development of the global economy. "In this macro context, our assessment of the stock market is relatively positive. In the context of the continuous development and opening up of China's financial and capital markets, we and other international institutions will play a more important role in promoting cross-border investment and capital flows, sharing international experience, assisting Chinese enterprises to better leverage the healthy development of 'two markets and two resources', and helping international investors understand the Chinese market. We also look forward to seeing more development and opening up measures continue to be implemented."
Full of confidence in the economic outlook
"China plays a crucial role in global economic growth and supply chains. At the same time, in terms of economic structure, while maintaining relatively fast economic growth, China is constantly making progress in promoting sustainable development and strengthening risk prevention. Therefore, the direction of China's economy towards high-quality development in the medium and long term is very clear." Fan Xiang said, "Goldman Sachs is full of confidence in the medium and long-term development prospects of the Chinese economy."
He stated that in the short to medium term, the Central Economic Work Conference emphasized the coordination of policies such as finance, currency, employment, industry, region, science and technology, and environmental protection, and included non economic policies in the evaluation of macroeconomic policy orientation consistency; Moderate efforts in fiscal policy; Propose practical measures to expand domestic demand and other policy directions to support economic growth.
Fan Xiang said that Goldman Sachs Research predicts that China's GDP will grow by 4.8% in 2024. Specifically, focusing on the three driving forces of the economy, Goldman Sachs Research believes that investment will be an important contributing factor to China's economic growth in 2024. "After the boost in consumption in 2023, 2024 will enter a relatively stable recovery process. In addition, we also expect the central government to continue promoting economic growth through fiscal policies next year and increasing policy support to alleviate the impact of the real estate sector on the economy in the medium to long term. Looking at the external economic environment, our judgment is that the likelihood of major economies experiencing recession is low, which will support the external demand market and China's export performance."
Be optimistic about the performance of the stock market next year
Fan Xiang further stated, "In such a macro context, our judgment of the stock market is also relatively positive. Goldman Sachs Research predicts that next year, driven by both corporate performance growth and valuation adjustments, the MSCI China Index and the Shanghai and Shenzhen 300 Index will rise by 12% and 16% respectively in 2024."
He said that the consumer sector, led by the service industry, should have good growth potential next year. In addition, industries with accelerated performance growth such as hardware, food, and catering are also worth paying attention to. The investment themes of mass consumption, artificial intelligence, globalized enterprises, high governance level enterprises, and specialized and innovative "little giants" in technology upgrading and innovation are also favored by Goldman Sachs Research Department. "Of course, overseas investors are also concerned about some uncertain factors facing the Chinese economy in the short term, and look forward to clearer progress in major issues such as the real estate industry and the focus of medium - and long-term policies. It is expected that the real estate market is expected to stabilize with policy support, and the deployment of financial work by the Central Financial Work Conference, the emphasis on important issues such as financial system regulation, the essence of serving the real economy, and risk prevention, also highlight China's emphasis on the capital market and financial system. Coupled with various signs of economic recovery, these developments will help boost market sentiment and restore global investor confidence."
Seize the opportunities in the Chinese market
"Since its establishment over 150 years ago, Goldman Sachs' core culture has always emphasized customer demand orientation, supporting capital connectivity, and better leveraging market mechanisms to support economic development. In the future, international institutions such as Goldman Sachs will play more roles in promoting cross-border investment and capital flows, sharing international experience, assisting Chinese enterprises to better leverage the healthy development of 'two markets and two resources', helping international investors understand the Chinese market, and many other areas." Fan Xiang optimistically looks forward to the opportunities in the Chinese market.
He said, "Focusing on customer needs has always been Goldman Sachs' core task. China is not only Goldman Sachs' global clients in various fields, but also an important strategic market for ourselves. We have been continuously monitoring and actively seizing opportunities related to China's domestic capital market and cross-border financial services opening up to the outside world. Goldman Sachs has established its Asia Pacific headquarters in Hong Kong since 1984, just celebrating the 40th anniversary of its Hong Kong office. In 1994, we opened representative offices in Beijing and Shanghai respectively. In the past few decades, we have not only established a wide range of investment banking and securities brokerage businesses in China, but also actively developed asset and wealth management businesses. In terms of investment banking business, Goldman Sachs has long been active in various domestic and cross-border benchmark financing projects of the Chinese government and enterprises. Currently, Chinese enterprises." "The demand for domestic and international financing is strong, and we look forward to the future development prospects."
He emphasized, "In the domestic market, the full implementation of the registration system in 2023 marks a stronger institutional inclusiveness of technological innovation in the A-share market and an improved ability to promote economic transformation. We see that as of November 30, 2023, the global equity fundraising scale this year is about 500 billion US dollars, and A-share related issuance fundraising accounts for more than 20% of the global fundraising amount. It is still an important market for global equity fundraising activities. On the capital side, based on a good medium - and long-term macro outlook and currently attractive valuations, international investors still attach great importance to the allocation of Chinese assets. Northbound funds have maintained a net inflow trend this year, and the scale of foreign A-share holdings has continued to grow steadily in the past three years. This shows that overseas investors continue to layout the A-share market." With more positive signals appearing in the market, the scale of northbound capital inflows will also expand
Fan Xiang told a reporter from China Securities News that securities brokerage has always been one of Goldman Sachs Group's core businesses. Helping international investors invest in the Chinese secondary market through channels such as interconnectivity and QFII, or helping overseas funds purchase overseas targets, are all strengths of Goldman Sachs. The global market is an important and sustainable business of Goldman Sachs. As China's bond, currency, bulk commodity and derivatives markets continue to open to the outside world, the tradable varieties are increasingly rich, and the risk hedging mechanism is constantly improved, Goldman Sachs will continue to participate in relevant opportunities in depth, and assist domestic and foreign investors in cross-border investment. In the field of asset and wealth management, Goldman Sachs continues to pay attention to investment opportunities for Chinese growing enterprises and actively participates in the domestic wealth management market business; On the other hand, it is also providing suggestions for global asset allocation for Chinese clients.
"Our attention and services to the Chinese market are also reflected in our research field. In recent years, Goldman Sachs has become one of the foreign-funded institutions with the most coverage of A-share listed companies. Our research department continues to promote exchanges between Chinese enterprises and the international market through in-depth and objective research. Fan Xiang said," The vigorous development of Goldman Sachs' business in China is inseparable from the accelerating opening-up of China's financial industry to the outside world. In recent years, Goldman Sachs has witnessed and participated in the continuous internationalization and marketization of China's capital market. China has gradually relaxed the threshold for cross-border investment and financing, provided more convenient measures, and enabled Goldman Sachs to better leverage its global advantages. After becoming a foreign-owned securities firm, we officially changed our name to 'Goldman Sachs China' in June this year, which is a great achievement for us. "A milestone in domestic development. In the future, we will adopt the 'One High Prosperity' strategy to provide customers with more comprehensive and comprehensive financial services, and help promote the high-quality development of the capital market