Morgan Stanley Sees $400 Billion China Inflows Over Five Years
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Yuan liberalization and the opening up of China’s capital account are likely to attract $400 billion of overseas funds to the nation’s stocks and bonds over the next five years, Morgan Stanley estimates.
In the most optimistic scenario, inflows could exceed $1.2 trillion if its markets are fully open, analysts led by Serena Tang wrote in a June 11 research note. A loosening of restrictions could also lead to almost $6 billion of annual outflows as domestic investors diversify their holdings, while funds moving in and out of the country may increase yuan volatility, they said.