UK's Huawei ban does not strengthen post-Brexit confidence among China investors - Shirley Ze Yu

Shirley Ze Yu

The UK's irrational turnabout by banning Huawei is not growing post-Brexit confidence among Chinese investors, says political analyst Shirley Ze Yu at her vlog. For the introduction of 5G it might put the UK even five to ten years behind compared to the rest of the world, she adds.

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Brexit does not concern China investors - Rupert Hoogewerf

Rupert Hoogewerf

Investors from China are not discouraged by the upcoming Brexit, the exit of Britain from the EU, says Hurun China Rich List founder Rupert Hoogewerf on his second tour with twelve Chinese investors through the UK, he tells the China Daily.

The China Daily:

Twelve Chinese investors attended the event as part of a weeklong tour of the United Kingdom in search of opportunities. 

Rupert Hoogwerf, chairman of Hurun and organizer of the trip, said the fact that Britain is in the process of leaving the European Union does not trouble Chinese entrepreneurs at the individual level. 

“Most of the interest today is either to send children to school here, or to buy real estate for long-term investments,” he said. “Not one of these entrepreneurs this year and last year was particularly concerned, so it wasn’t really relevant.” 

At this year’s event, the companies making pitches were scale-ups, rather than start-ups. Hoogwerf said the event focused on start-ups last year but that “was actually a little bit too much for these people to swallow, so we think that the idea of scale-ups is potentially a much better way of doing it”. 

Hoogwerf said several investors had shown interest in some of the presentations.

More in the China Daily.

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Brexit fallout: pressure on the Renminbi - Victor Shih

Victor Shih

China has been preparing for the fallout of a decision of the Federal Reserve, but find themselves dealing with an unexpected black swan, says financial and political analyst Victor Shih to Bloomberg. The Renminbi might be under pressure.

Bloomberg:

Victor Shih, a professor at the University of California at San Diego who studies China’s politics and finance: 

"The value of China’s foreign-exchange reserves just dropped significantly. If the euro devalues along with the pound, the renminbi will also be under pressure. Brexit also shows that it’s hard to anticipate black swans as China’s technocrats try to do. They had been preparing for a Fed rate hike, but a somewhat different shock hit which may require a different response."

More in Bloomberg.

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Brexit fallout: limited risks for China - Arthur Kroeber

Arthur Kroeber

While the world is trying to get to grips with the fallout of a possible Brexit, very few of the effects for China can be sure, with the exception of the currency trade, says economist Arthur Kroeber to Bloomberg. At this stage, the risks seem fairly limited.

Bloomberg:

Arthur Kroeber, the founding partner and managing director at research firm Gavekal Dragonomics. 

"The only major impact that we can identify is on the currency. To the extent that Brexit triggers a broad-based dollar rally that’s sustained, that makes management of the exchange rate harder. If the dollar goes up a lot then Chinese corporations have a lot more incentive to hold dollars rather than renminbi. They would start to shift money one way or another from renminbi into dollars, and that gets recorded as a capital outflow. Then in order to maintain the exchange rate the People’s Bank has to spend reserves." 

"If you are spending them at a $100 billion a month as they were at the peak in January and February they probably have about six months of spendable reserves before they get to a point where they say it’s not worth it any more. Based on what we’ve seen so far it doesn’t seem like the Brexit outcome is large enough to make that a high risk in the next month or so but who knows?"

More in Bloomberg.

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