Staff at an industry zone in Lianyungang, East China's Jiangsu Province sort packages on the day China's major e-commerce platforms including JD and Alibaba's Tmall celebrate this year 618 mid-year shopping festival. Photo: VCG

Many international asset managers have increased their holdings of Chinese shares, reflecting their full confidence in the stable recovery of China's economy. Analysts believe that the A-share market will provide a safe haven for international capital, with up to 400 billion yuan ($59 billion) worth of foreign capital expected to flow into the market in 2023.

Greenwoods Asset Management Hong Kong increased its stake in Chinese e-commerce platform Pinduoduo by about 72 percent in the fourth quarter in 2022 compared with the previous quarter to 5.58 million shares, as indicated by a recent filing with the US Securities and Exchange Commission (SEC).

The firm also increased its holdings of JD.com shares by 51 percent and increased its stake in Kanzhun, the owner of Boss Zhaopin, by 35 percent, according to the filing.

Perseverance Asset Management International (Singapore) added Alibaba and NetEase to its holdings in the fourth quarter of last year. It also increased stakes in its heavyweight stocks including Pinduoduo, ZTO Express and Chinese e-vapor brand RELX Technology, according to a document posted to the SEC.

Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Tuesday that these moves reflect confidence in China's consumption recovery as well as the healthy and sustainable development of the country's platform economy after the last round of rectifications.

Along with China's reopening, the economy will continue to outperform other major economies, which along with a strong yuan, means that foreign capital will continue to flow into Chinese stocks - both those listed overseas and in the A-share markets - in the long term, Dong said.

According to the People's Bank of China, the country's central bank, overseas institutions and individual investors held A-shares worth a total of 3.20 trillion yuan as of the end of 2022, up 15.46 percent from the end of October.

International financial institutions have stepped up investment in China for long-term development in one of the world's largest stock markets.

For example, Standard Chartered Bank (Hong Kong) recently said that it obtained an approval from the China Securities Regulatory Commission to set up a securities firm in the mainland. 

It was the first time that the Chinese authorities granted approval for the establishment of a foreign wholly owned securities firm since the removal of foreign ownership caps in securities firms in 2020, the company said in a press release sent to the Global Times.
 
"We are confident of the continued opening of financial markets in China, and very positive about the country's development prospects, in particular the promising investment value of the onshore capital markets and the growing attractiveness of renminbi assets in offshore markets. ''This is another major milestone for our China franchise, one we remain very committed to," Benjamin Hung, CEO for Asia of Standard Chartered, was quoted as saying.

Thanks to increasingly stable economic growth, the relatively sound fundamentals of Chinese leading companies and factors like slowing interest rate hikes by the US Federal Reserve, China International Capital Corp projected in a note that net flows of foreign capital into the A-share market may reach about 300-400 billion yuan in 2023, according to media reports.