Foreign Investors More Confident in Allocating to China

International investors and financial leaders have expressed growing confidence in allocating capital to China, citing the country’s economic resilience, manufacturing strength, and a new wave of financial opening-up policies unveiled at the 2026 Lujiazui Forum in Shanghai.

Held on June 17-18 under the theme “Financial Development and Cooperation under the Global Governance Initiative,” the forum brought together over 70 Chinese and international participants, including central bank governors, financial regulators, and executives from major global financial institutions. The event served as a key platform for Chinese regulators to communicate policy direction and for global investors to gauge the trajectory of China’s financial market liberalization.

Policy Initiatives Signal Deeper Opening-Up

PBOC Governor Pan Gongsheng announced six major policy initiatives aimed at deepening financial sector reform and internationalizing the renminbi. Among the most significant measures was the creation of a FIMA RMB Repo facility, which allows foreign central banks and sovereign wealth funds to obtain RMB liquidity using Chinese government bonds as collateral. According to CCTV News, this initiative is expected to significantly enhance the attractiveness of renminbi-denominated assets for international investors.

Additional measures include an offshore RMB forex trading pilot in the Shanghai Free Trade Zone and an action plan for developing Shanghai as an offshore financial center. CSRC Chairman Wu Qing also announced the expansion of the STAR Market’s fifth listing standard to include AI large model companies, signaling China’s strategic focus on becoming a global leader in artificial intelligence.

Global Investors Voice Confidence

Emerson Pickman, President of PIMCO, highlighted China’s resilience amid global headwinds. “Even under multiple external pressures, China’s economy remains resilient, with stable trade balance and particularly outstanding export competitiveness,” he said at the forum, as reported by CCTV News.

Kevin Sneader, President of Goldman Sachs Asia Pacific, attributed investor confidence to China’s manufacturing strength. “Their confidence mainly comes from China’s strong manufacturing strength, especially in exports,” Sneader said. He noted that products such as solar energy equipment and automotive batteries now have strong global demand, providing a significant portion of China’s economic momentum.

According to CGTN, Sneader also stated that China’s technological innovation has reached a turning point, with AI potentially contributing up to 8% of China’s labor productivity growth over the next decade.

Christopher Hayward, Chair of the Policy & Resources Committee at the City of London Corporation, said the pace of China’s innovation and economic growth is “astonishing,” adding that cooperation space with China is broad and prospects are exciting.

Ben Squires, Chief Investment Officer of Australian NGS Super, said he was “very pleased” to hear about China’s opening-up policies at the forum. “These areas as investors are of great interest to them, and this gives them more confidence to allocate capital to China,” he said.

Morgan Stanley: Capital Inflows Just Beginning

Gokul Laroia, CEO of Asia and Co-Head of Global Equities at Morgan Stanley, offered a measured but optimistic perspective. He said global investor interest in China is rising, driven in part by artificial intelligence, but cautioned that current capital inflows remain only a small fraction of what “should be and is needed” given the market’s long-term potential, as reported by CGTN.

Giovanni Tria, former Minister of Economy and Finance of Italy, noted that China is playing an increasingly important role on the world stage. “China is continuously advancing the opening of its financial market,” Tria said, as reported by CCTV News. He also highlighted the need for greater coordination among major currencies in the global monetary system.

Implications for Global Markets

The policy package announced at the forum represents one of the most significant financial opening-up initiatives in recent years. If implemented effectively, these measures could substantially increase foreign portfolio investment into Chinese bond and equity markets. The FIMA RMB Repo facility, in particular, positions the renminbi as a more accessible reserve currency for central banks worldwide.

However, challenges remain. Geopolitical tensions, ongoing trade frictions, and global economic uncertainties could temper the pace of capital inflows. As noted by several speakers at the forum, the rapid integration of AI in financial markets also carries systemic risks that require careful regulatory oversight.

What to Watch

Market participants will be watching for the implementation timeline of the FIMA RMB Repo facility and the offshore RMB forex trading pilot. The expansion of the STAR Market to AI companies could also trigger a wave of IPOs from Chinese AI startups, further deepening the country’s capital markets and providing new avenues for foreign investment.

As the People’s Daily noted in its coverage, the forum sent a strong signal on China’s commitment to technology-driven finance and innovation-led growth — a message that appears to be resonating with global investors.