Leading sovereign funds in the Middle East are anticipated to invest $1 trillion to $2 trillion in China by 2030, according to the president of the Hong Kong Stock Exchange, Nicolas Aguzin. This comes as the state-controlled wealth funds in the area presently have about $4 trillion in investment capital readily available, with just a little part being invested in Asia, particularly China. Nevertheless, this investment capital is expected to grow to about $10 trillion by the end of this decade, “we estimate somewhere in between 10% -20 % will be invested in China”, said Aguzin, a previous JP Morgan lender.
This provides a distinct chance for China and the Middle East, as China’s capital market is quickly establishing, and with the nation being the main trading partner of about 140 economies on the planet, the capital will begin to move out of the country and circulation to eastern and western markets. This bodes well for trade in the Middle East, as more of that capital will begin to come out of the mainland and go worldwide.
Sovereign wealth funds in the Middle East spend for behalf of their federal governments to produce long-lasting returns, and those in the six-member economic bloc of the GCC, including the Public Investment Fund in Saudi Arabia, Qatar Investment Authority, Kuwait Investment Authority, Abu Dhabi Investment Authority, and Mubadala Investment Company in the UAE, channel the Gulf countries hydrocarbon wealth across asset classes, including financial obligation and equity capital markets..
As such, this reallocation of financial investments in Chine represents a considerable shift in investment technique for these funds, and it is anticipated to have a major impact on the worldwide economy in the years to come.