Robeco, The Investments Engineers

01-20-2023 · Yearly outlook

Constructive outlook for Chinese equities in 2023

China’s dramatic policy pivot in late-2022, embracing a pro-growth agenda and abandoning zero-Covid, has set up its battered equity markets for a sustained revival.

    Authors

  • Jie Lu - Head of Investments China

    Jie Lu

    Head of Investments China

  • Helen Keung - Client Portfolio Manager

    Helen Keung

    Client Portfolio Manager

Top keywords

The move has shattered the narrative among China skeptics that political leaders had ushered in a repressive economic ice age. The flexibility demonstrated in the fourth quarter of 2022 has in our view set China up for growth in 2023, after three years of stagnation and uncertainty.

The road ahead remains challenging, with confidence in the property market still absent and the disruption caused by the country’s sudden Covid exit strategy making headlines. Nevertheless the pragmatism and comprehensive nature of the 2023 policy prescription has justified our confidence that the worst was indeed over for China by Q3 2022.

We are upgrading our outlook for China to constructive based on our five-factor model, with a confluence of macroeconomic pro-growth pivots such as expansionary fiscal policy, the potential for further monetary policy easing, China reopening, and comprehensive policy support for the property sector. With valuations in key sectors still at historical lows and investor sentiment recovering, we believe it’s an appropriate time to increase exposure to Chinese equities, through an active investment strategy.

Stay informed on emerging markets with monthly mail updates

Stay updated

Market outlook

This is how we summarize the current outlook for investors in China based on our five-factor model.

contructive-outlook-for-chinese-equities-in-2023-fig1.jpg

Download the full insight pdf for analysis of China’s macroeconomic outlook, the Covid re-opening, the property sector, the digital sector and possible risks ahead.

Download


Related topics

share

Let's keep the conversation going

Keep track of fast-moving events in sustainable and quantitative investing, trends and credits with our newsletters.

Stay updated
Robeco

Robeco aims to enable its clients to achieve their financial and sustainability goals by providing superior investment returns and solutions.

Important information
The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).
This website is intended for use only by non-U.S. Persons outside of the United States (within the meaning of Regulation S promulgated under the Securities Act who are professional investors, or professional fiduciaries representing such non-U.S. Person investors. By clicking “I Agree” on our website disclaimer and accessing the information on this website, including any subdomain thereof, you are certifying and agreeing to the following: (i) you have read, understood and agree to this disclaimer, (ii) you have informed yourself of any applicable legal restrictions and represent that by accessing the information contained on this website, you are not in violation of, and will not be causing Robeco or any of its affiliated entities or issuers to violate, any applicable laws and, as a result, you are legally authorized to access such information on behalf of yourself and any underlying investment advisory client, (iii) you understand and acknowledge that certain information presented herein relates to securities that have not been registered under the Securities Act, and may be offered or sold only outside the United States and only to, or for the account or benefit of, non-U.S. Persons (within the meaning of Regulation S under the Securities Act), (iv) you are, or are a discretionary investment adviser representing, a non-U.S. Person (within the meaning of Regulation S under the Securities Act) located outside of the United States and (v) you are, or are a discretionary investment adviser representing, a professional non-retail investor.


Access to this website has been limited so that it shall not constitute directed selling efforts (as defined in Regulation S under the Securities Act) in the United States and so that it shall not be deemed to constitute Robeco holding itself out generally to the public in the U.S. as an investment adviser. Nothing contained herein constitutes an offer to sell securities or solicitation of an offer to purchase any securities in any jurisdiction. We reserve the right to deny access to any visitor, including, but not limited to, those visitors with IP addresses residing in the United States. This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.