Chinas fast market growth attracts investors

By Cong Mu

Foreign companies and investors are increasingly attracted by the growing domestic demand in China and are seeking quality information to help them better comprehend the growth story, the CEO of a London-based brokerage said.

Laurie Pinto, CEO of North Square Blue Oak (NSBO), said Monday in the firm's Beijing office that while the credit crunch that originated in the US has hurt liquidity and confidence in the Western world, China remains a bright spot, with its economy still growing at a fast pace.

Pinto said that the next stage of growth in China, "which is not just for roads and bridges but of the service economy and internal consumption in the Chinese market, will create very strong opportunities."

Investors such as Anthony Bolton of Fidelity International have been preparing to cash in on such opportunities.

Bolton, one of the most successful money managers in the UK, has deferred his retire-ment to set up a new China equity fund in Hong Kong.

Botlon said in a blog piece posted on his company's website in Novermber 2009, "I have become increasingly convinced by the investment opportunities available in China today."

The company said February 9 that it plans to raise about 630 million pounds ($982 million) for Fidelity China Special Situations, the closed-ended fund run by Bolton.

Not only are foreign fund managers interested in trading China-related stocks, but foreign companies, such as Swiss watchmakers and Western drug companies, are also looking forward to selling in China, Pinto said.

Long Feifei, a shop assistant at a Swatch store in Dongzhimen in downtown Beijing, said that a new collection of Swatch watches, based on the traditional Chinese concept of eight natural elements and released in early January, have sold especially well.

Long said that during the peak seasons, such as Christmas, New Year's and Valentine's Day, the store, which is mid-sized compared with other Swatch stores in the city, can sell about 30 watches a day; most customers are young, urban Chinese.

The latest data from the Ministry of Commerce showed that domestic consumption is robust and foreign direct investment (FDI) has been increasing.

From February 13-19, retail sales of consumer goods across the country reached 340 billion yuan ($49.8 billion), up 17.2 percent from the same Lunar New Year period in 2009, according to the ministry.

Meanwhile, FDI in January was $12.6 billion, up 20.34 percent year-on-year, the sixth consecutive month of growth.

Pinto said that as China and the West, especially the US, are increasingly intertwined, every-one in the Western investment community is trying to understand what China stories are really moving the stock markets, as well as the real intentions of the government.

However, Pinto pointed out that the Western media is politically conservative and media outlets often fail to give an accurate interpretation of what is actually important and what is not in China.

He expects research firms and thinktanks, which provide different but more accurate and commercially useful information on China, will prosper along with the Chinese economy.