The latest Hong Kong summit: Griffin says investors should invest in China.

Nov 7
A global financial conference has begun in Hong Kong and is anticipated to draw some 300 executives, including James Gorman of Morgan Stanley. David Solomon of Goldman Sachs Group Inc. and Ken Griffin of Citadel

The elite of Wall Street is arriving in a city that has seen significant change in the last several years: financial corporations have eliminated hundreds of top positions, and tens of thousands of highly skilled individuals have left.

The founder of Citadel, Ken Griffin, stated that the world economy is extremely vulnerable to the inflationary effects of deglobalization and that foreign investors should keep an eye on and make investments in China. Furthermore, he mentioned that the US government is spending aggressively, which might cause the deficit to rise.

Colm Kelleher, chairman of UBS Group AG, believes that non-bank financial intermediaries, which currently hold half of the world's financial assets, could be the target of the next global financial crisis.

"I believe that this industry will experience a fiduciary crisis at some point in the future. The banking regulator is finally concentrating on this after being alerted to the risk in 2019." Concerns about the shadow banking industry are legitimate, according to Kelleher.

A top People's Bank of China official expressed optimism about the economy, pointing out that the housing market had long-term potential and that some debt risks would likely lessen.

Deputy Governor Zhang Qingsong recognized in his statement at the forum that "international investors are concerned about the Chinese economy, including the pace of its recovery as well as problems related to real estate and local government borrowing."

The market is "underestimating" how long the tightening cycle in the US and Europe will run before equilibrium is reached, according to Bob Prince, co-chief investment officer of Bridgewater Associates.

"The calm state of markets despite global geopolitical events, inflation, and rising interest rates is a cause for concern," Christian Sewing, the CEO of Deutsche Bank, stated during a forum discussion. Market events could result from another geopolitical escalation, he said.

Nicholas Aguzin, CEO of Hong Kong Exchanges & Clearing Ltd., predicted that the top sovereign wealth funds in the Middle East will boost their holdings in China from the $40 billion they already have to $1 trillion.

According to him, the ten biggest sovereign wealth funds in the Middle East intend to raise the amount of money they manage to roughly $10 trillion. Hong Kong is an excellent center for money from the Middle East, and investors from the Middle East want to ensure that money invested in Hong Kong is also given back to their region. Of the present $4 trillion, 10% will be mostly in China.
 
According to Jenny Johnson, president of Franklin Templeton, "the US Federal Reserve is almost done raising rates, so investors may start locking in long-term rates, such as on high-yield bonds or private loans."

China will simplify the Stock Connect program, which connects mainland markets to Hong Kong, allows block trading, and makes it simpler for mainland Chinese companies to launch initial public offerings in Hong Kong. As soon as the various departments have come to an agreement and the specifics have been ironed out, this expansion will get underway.

"Chinese President Xi Jinping attaches great importance to Hong Kong's development, will contribute to maintaining the city's status as an international financial center, and will support cross-border trade and investment with Hong Kong, expanding the opening up of the financial sector to the outside world," He Lifeng, the vice premier of China, said.

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