Exclusive: China invites global investors for rare meeting as economy sputters

HONG KONG, July 14 (Reuters) – China’s financial regulators have invited some of the world’s biggest investors to a rare symposium next week, three sources said, seeking to encourage foreigners to continue investing in the country. the world’s second largest economy despite its recent weakness and rising geopolitical tensions.

The meeting in Beijing next Friday will focus on the current conditions of US dollar-denominated investment firms in China and the main challenges it faces, according to sources with direct knowledge of the matter and invitation documents reviewed. to Reuters.

The gathering comes at a time when global investors and banks are warning that confidence is waning in China’s economic outlook. The country’s post-pandemic recovery is quickly losing steam and Sino-US relations are at the bottom of national security issues – including Taiwan, the US export ban on advanced technologies and policies. in China’s state-led industry.

Such a meeting, with a clear agenda to discuss the challenges facing global fund managers investing in China, is rare, the three sources said, and reflects Beijing’s eagerness to strengthen on the confidence of foreign investors.

Major foreign and domestic fund managers such as private equity (PE) firms, known as general partners (GPs), and their investors or limited partners (LPs) including sovereign wealth funds and pension funds are expected to participate in the meeting, according to sources.

They will also be encouraged to offer suggestions to help solve challenges facing their businesses in China and share their economic outlook, according to the sources and documents.

Global funds attending are likely to send their senior staff based in China, although some senior executives will fly to China for talks, the sources added.

All three sources spoke on condition of anonymity because they were not authorized to speak to the media.

Burdened by strict COVID measures, China’s economy grew by only 3% in 2022, one of the worst showings in decades. The movement returned earlier this year after the curbs were suddenly lifted, but momentum has slowed significantly since then, as policy uncertainty and tensions between China, the US and other Western powers rise.

The meeting also comes as some PE firms and their investors are rethinking their China strategies after a year, battered by the explosion of private businesses such as tech companies, which cast a long shadow over the return prospects of PE investors and reduced investment opportunities, separate sources told Reuters.

The No. 3 Canada’s pension fund – Ontario Teachers’ Pension Plan (OTPP) said in January that it has stopped future direct investments in private assets in China.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), the country’s securities regulator, will address the audience, according to two of the sources.

The CSRC did not immediately respond to questions from Reuters on Friday.

The meeting was organized by China’s fund regulator Asset Management Association of China (AMAC). AMAC did not immediately respond to questions from Reuters.

Months of disappointing economic data had MSCI’s China share index down 2% on the year, against a 15% gain for global stocks, while the yuan hovered at an 8-month low, pushing of some investors to close their strategies in China.

US dollar-denominated fundraising by China-focused venture capital and PE firms this year had the weakest first half of the year in the past decade, data from industry tracker Preqin showed.

China-focused GPs raised just $5.5 billion in US dollar-denominated funds in the first half of the year, Preqin data showed, far from its peak of $27.6 billion raised in the same period in 2021.

China’s policies including security crackdowns, its harsh regulation of the tech industry and strict monitoring of foreigners have convinced many global companies to stay away from the country, said Andrew Collier, managing director of Hong Kong- based Orient Capital Research.

“Now that the economy is slowing down there is a new charm offensive to convince foreigners to come back,” he said, adding that the measures may come “too little, too late”.

The symposium also follows signals from authorities last week that a crackdown that began in late 2020 on the technology sector ended with fines on Ant Group and Tencent.

In another strong signal that the crackdown is over, Premier Li Qiang on Wednesday met with companies such as Alibaba’s cloud unit and Meituan, and urged them to do more to support China’s economy.

Reporting by Xie Yu and Julie Zhu; Additional reporting by Selena Li; Editing by Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.