Investors worldwide will be scrutinising the meeting between Joe Biden and Xi Jinping, hoping for “bullish signals,” says the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organisations.
deVere Group’s Nigel Green is speaking ahead of the U.S. President and his Chinese counterpart’s meeting in Bali, Indonesia, at the Group of 20 summit.
He notes: “This is the first in-person meeting between leaders of the world’s largest economies since the start of the pandemic. It’s a critical one as relations between the economic superpowers are souring.
“Investors will scrutinise the language and tone carefully, hoping for bullish signals.
“What are they looking for? Any indication that Biden could remove tariffs would be extremely bullish.
“As would Xi suggesting he is to step back from his Zero Covid policy, which has had a stranglehold on the Chinese economy and global supply chains.
“Similarly, a signal that China could push Putin to end the war in Ukraine would buoy investors.”
In recent months, there has been a slew of investors shunning the world’s second-largest economy and “they’re now looking for opportunities to return,” says Nigel Green.
Investors have been claiming a variety of reasons for pulling out.
The deVere CEO continues: “One of the main reasons is unpredictable regulatory crackdowns. The regulatory attacks have been perceived by many as highlighting the Chinese government’s new thinking and its increasing push for control of private enterprise, including in the crucial tech sector.
“Another cause for concern has been Beijing’s strict zero-Covid policy and draconian lockdowns, which have had a serious economic impact and created ongoing uncertainty. Investors say they just do not know where the policy’s consequences may lie.
“Elsewhere, China’s jittery real-estate sector is also triggering investor fears. It matters because construction and property sales have been the biggest drivers of economic growth since President Xi Jinping came to power a decade ago.”
He goes on to add, “Although its economic growth rate might be lower than in previous years, there’s still much potential in China.
“For instance, its urbanisation strategy is still in its infancy, and the scope is massive. Plus, the reform of state-owned companies could blow apart monopolies and create major investment opportunities.”
Nigel Green concludes: “Investors are looking for an excuse to get back into China. The Biden-Xi meeting will be pivotal.”