Sep 30, 2019

China seems unfazed by U.S. threats to limit investor access

Illustration: Lazaro Gamio/Axios

China appears unbothered by news the Trump administration is considering limiting U.S. investors’ portfolio flows into the country.

What's happening: China has been opening its capital markets to foreign investment, and over the past 8 years money flowing into China's stocks and bonds has grown 6-fold to nearly $1.3 trillion, per Wind Information data shared by Seafarer Funds.

  • Americans are responsible for nearly half of that total, scooping up $535 billion worth of Chinese assets.

Yes, but: China has opened up the markets largely as a show of good faith to U.S. and European investors and index makers who want access to its high-yielding bonds and fast-growing companies.

  • Further, capital flows from U.S. and other foreign investors has slowed significantly this year, largely as a result of the trade war.

What's next: China says it will continue to open its financial markets and encourage foreign investment, according to a summary from the eighth meeting of the Financial Stability and Development Committee posted on its website Sunday, Bloomberg reported.

Go deeper: China is eroding the U.S. edge in AI and 5G

Go deeper

Foreign investors have already pulled back from China

Data: Institute of International Finance; Table: Axios Visuals

Investment in Chinese assets fell significantly this year as a combination of the trade war and increasingly attractive opportunities elsewhere spread money across a variety of locations in the emerging world.

The big picture: While the economies of many emerging countries are feeling the pressure from China's slowdown and reduced global trade, foreign investment has picked up notably this year from 2018.

Go deeperArrowOct 2, 2019

China offers drug companies market access in exchange for lower prices

Doctors visit a patient in the First People's Hospital of Yancheng in Yancheng. Photo: Xinhua/via Getty Images

China wants to have better health care at a lower cost than the U.S. or other countries — a plan that involves extracting massive discounts from pharmaceutical companies, Bloomberg reports.

Why it matters: The trade-off for drug companies is access to China's enormous population and, thus, a giant market, and Chinese patients are now paying much less than Americans for the same drugs.

Go deeperArrowOct 21, 2019

Trump's promises on "phase 1" deal with China fall flat

President Trump and China's President Xi Jinping, Nov. 2017. Photo: Nicolas Asfouri/Getty Images

It's been a week since President Trump touted his "phase 1" partial trade agreement with China as the greatest-ever deal for U.S. farmers — but China isn't endorsing his promises.

Where it stands: China has not confirmed Trump's claim that it will buy $40 billion–$50 billion worth of U.S. agricultural goods, and it says a final deal would require the U.S. to cancel all existing and future tariffs, CNBC reports. No final decision has been reached to determine if the U.S. will push tariff increases scheduled for Dec. 15.

Go deeperArrowOct 17, 2019