Win-win: China's capital markets are opening up more
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The renminbi's (RMB) profile as a global currency continues to rise. In value terms, the RMB accounts for more than 2% of international financial transactions, and we expect this to grow as China eases the rules for access to its capital markets.
The key takeaways from this edition of Economic Insights are:
- China's economy is the largest in the world in purchasing power parity terms.
- China has committed to easing access to its capital markets, and we expect foreign holdings of RMB assets to rise, from a below 3% share of its bond and less than 2% of the equity markets.
- For insurers, RMB assets are an investment diversification opportunity and a source of potentially higher returns.
- We also expect foreign insurers to continue to expand their physical footprint in China.