Understanding China: an economic and investment perspective, part I

March 25, 2021

No discussion of the health and future of the global economy is complete without including an analysis of China’s economic development and integration into the global financial system. Admittedly, China is an immense subject to undertake. However, we have prepared a three-part series that is designed to provide readers with a summary overview of China’s economy and financial markets. The first part provides a recent history of China’s political economy, connecting the dynamics of party leadership and state-led economic growth. In the second part, we will turn our focus to the characteristics of and recent developments in China’s financial markets, including China’s version of stake-holder capitalism, where state influence is balanced against market forces. The last section in the series will focus on the changing investment opportunities in China.

Our hope is to provide a comprehensive and balanced description of China’s capitalism with special features to facilitate a multi-dimensional perspective on investing in China. We believe that financial market participants must understand the nature of the Chinese economic and financial system as the country’s influence continues to grow, so we seek to provide that perspective in this paper.