Global investors are still waiting for “concrete policy initiatives” from the Chinese government to bolster its economy as business confidence remains weak, according to alternative asset manager PAG.
(Bloomberg) — Global investors are still waiting for “concrete policy initiatives” from the Chinese government to bolster its economy as business confidence remains weak, according to alternative asset manager PAG.
Some of the regulatory actions in the past two or three years failed to consider market sentiment and were implemented without warning, causing shocks and spooking investors, said Weijian Shan, executive chairman and co-founder of the Hong Kong-based firm that manages more than $50 billion.
“It takes a couple of years of policy stability for full confidence to return,” he said in a Bloomberg Television interview on Thursday. “Regulators, I hope, will consider the whole picture before taking any regulatory actions, even if well intended.”
As China’s economic recovery loses steam, Beijing has vowed support for private businesses after sweeping crackdowns on the technology and other sectors that imposed losses on global investors and eroded their confidence. Premier Li Qiang met executives from major internet companies including Meituan, Alibaba Group Holding Ltd. and ByteDance Ltd. last month to show support.
While Chinese officials have been encouraging private businesses to expand investments and improve growth prospects, they haven’t delivered “major stimulus as yet,” Shan said, adding that the government has ample tools if it wishes to do so.
There is room for expansion on both monetary and fiscal fronts, he said. “Sentiment is rather weak, and confidence remains rather subdued.”
PAG focuses on buyouts, which account for about 10% of the private equity market where most capital goes into growth and venture businesses, Shan said. Losses on the growth side in the past few years and weak sentiment have made the buyout side “more or less a buyer’s market,” he said.
“People remain cautious with regard to the China market,” he said. “But there are good opportunities out there because firms need capital.”
–With assistance from Rishaad Salamat and David Ingles.
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