Global asset price turbulence brings challenges, opportunities to China

Under impacts of both domestic and international factors, the Chinese yuan's exchange rate, which was in steady rise over the past few years, recently showed fluctuations. However, the yuan is overall still strongly appealing to international investors.

From the aspect of the exchange rate, the yuan's value is largely stable, compared with the substantially depreciated currencies of some economies.

Judged by the appreciation of the yuan against major international currencies in the past decade, the devaluation of the yuan, especially against the US dollar, in the second half of 2015 should be regarded as a result of normal adjustment and fluctuation under the market pricing mechanism, said Qian Jun, associated director of China Academy of Financial Research.

Zhou Xiaochuan, governor of the People's Bank of China, China's central bank, said earlier this week that there is no basis for continued depreciation of the yuan and that China would not let market sentiment be dominated by speculative forces.

China will keep the yuan stable versus a basket of currencies while allowing greater volatility against the US dollar, Zhou said.

From the aspect of the interest rate, developed economies remain in the environment of low interest rates or even negative interest rates, with a low return of gains from fixed-income investment products, while China's interest rate level is still attractive, and the yuan-dominated assets still possess considerable status in the calculation of international investors. For long-term investors, "configuring China" maintains a most important topic.

Investment opportunities in china amid stock turmoil

The sharp fluctuation in the stock markets of Europe, Japan and the Untied States has led to noticeable crowding-out effects, prompting some of the capital to reflow to the Asian market, especially the Chinese mainland stock market, which has experienced significant adjustment.

The large volatility in developed economies showed that their markets, after hitting multiple record highs, are suffering from stamina fatigue.

The sharp drop in Chinese mainland stock market over the half-plus year, however, has created investment value for the market. The stock market rise for three consecutive days after the Spring Festival holiday season indicated that confidence in the Chinese capital market is coming back.

The growth quality of the Chinese economy has been improving though its growth rate has been slowing, and analysts emphasized that the momentum of structural reform has been stronger and stronger, which prompted the emergence of more "comparative advantages" of the Chinese mainland stock market in the global environment.

The rise in the volume and prices of emerging industry sectors, which includes the virtual and reality technology and smart device applications, showed that the new Chinese economy has aroused attention from and triggered pursuit by international and domestic investors.