Foreign corporate investment into China is expected to rebound this year, as economic uncertainties in the country have eased significantly this year, along with the reopening and resumption of staff exchanges, said Wang Tao, Chief China Economist at UBS.
Despite relocation of some production away from China, the country itself remained a large market and many still continues their investment in the mainland, thus reflecting not an outflow of investment but a realignment of global product chain, she said.
The bank is optimistic about the performance of the China stock market in 2023, expecting capital inflows to reach 300 billion yuan with positive long term outlook and there is still confidence from overseas to invest in the China market, though takes time to recover, the bank said.
UBS gives Overweight ratings to the leisure services, household appliances, food and beverage, battery industry chain, and computer business sectors, while giving Underweight ratings to the banking, energy, infrastructure, agriculture, forestry, agriculture and fishery sectors.