Global investors are seeking safe haven in China as inflation rises in the United States and the West.
The Chinese currency has come to be seen as a safe haven against inflation and problems related to the pandemic.
SHANGHAI (Reuters) - Foreign investors are entering China in early 2022, seeing it as a safe haven from the inflation, growth, and pandemic-related problems plaguing most other markets.
Despite seeing returns eroded last year by Beijing's regulatory and political purge, global fund managers are pouring money into mainland equities and bonds, betting that promises of Chinese stability, monetary and fiscal easing, and moderate inflation could protect them against volatility in other markets.
This contrasts sharply with conditions elsewhere. Major central banks are preparing to withdraw excess stimulus measures from the past two years, and the Federal Reserve is accelerating monetary tightening to tame runaway inflation, potentially hurting stock values and profits.
According to David Dali, head of portfolio strategy at Matthews Asia, China is the "only favorite country" in 2022 among the approximately 30 emerging stock markets that could be invested in.
"We believe that Chinese valuations are some of the least risky and most attractive of all major markets," said Dali.