Is China the future of finance?
First, I'd like to start by explaining I'm still a college student, so please understand if any of my perspectives seem ignorant or plain wrong.
People have always been saying "China is the future such and such..."
yet as of now, China seems yet to be the current "Powerhouse" of finance.
Also, recently the CCP, Xi, has been seemingly increasing their stances in controlling the free flow of money in China.
However, I do know that it is indisputable that there is a lot of cash money sloshing around in China, just..it's that it's within China.
So, based on:
China does have a lot of capital at disposal as a nation.
China's government seems to be increasingly controlling of the movement of money.
It's been a while now since people have been saying that China is the future.
Do you think China is still "the future" of finance?
I'm asking in terms of the many different areas of finance,
IBD, S&T, AssetManagement, Hedgefund, etc.
and would honing my Mandarin skills be a good investment? (I'm currently conversational/conversational fluent and I'm looking toward more techincal roles than client facing roles).
My two cents, no. Although they’ve loosened up, China is still very strict on capital controls. China is also increasingly more and more conservative with the amount of financial risk they’ll allow within their system (the government essentially shutting down Ant showed that their tolerance of levering up their financial system is far lower than Europe and the US). Will China become more and more influential in the financial world? Yes, that comes naturally with their ascension into becoming the economic superpower. Will they become the financial capital? I’d say definitely no.
That being said, learning the language of 1.4B people and a global superpower would never be detrimental to your career down the line, and if you have time I’d definitely encourage you to learn Chinese.
I’d second the above comment. China as an economic power is undeniably significant and is continuing to grow. However, from a strictly institutionalized financial perspective, they still are very regulated and controlled in a manner that doesn’t allow it to fully integrate with the rest of the world’s financial system(s). Just as an example, 75% of stock ownership in China is retail investments, which is the approximate inverse of Western ownership (75% institutional ownership) due to China not permitting domestic money to be invested overseas. Further, much stricter regulation on financing means that the flows are more isolated/domiciled than many Western economies like the prior commenter mentioned. I’m no expert but China has not shown much of an interest in increasing financial integration and seems to be focused on building their domestic system in a manner which they can control. A very interesting topic so kudos to you for seeking knowledge.
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