USCBC on China's Stock Market Gyrations

The first trading week of 2016 has garnered significant media attention on China’s stock market, and the US-China Business Council has been active in ensuring that coverage reflect the full context of the economic environment. Yesterday, the LA Times featured USCBC President John Frisbie’s insights on China’s growth.

 Frisbie’s full press statement from January 5, 2016:
“Global investors should not view China’s stock market as a reflection of China’s economy and should not overreact. Movement in China’s stock indices has less to do with market or earnings fundamentals of the listed companies than it does with the need for further financial market reforms in China.
“Putting the stock market aside, China’s economy is slowing, largely on government guidance. USCBC members see the slowdown in their top-line revenue numbers, and this “new normal” requires companies to recast their growth expectations.  Nonetheless, 40 percent of our members still saw double-digit revenue growth in our annual survey released four months ago. China is delivering better growth than other markets around the globe and likely will continue to do so. Even at 6 percent annual GDP growth, China would add the equivalent of two Germanys to its economy over the next decade…and Germany is the world’s fourth-largest economy.
“Far more important to American companies are issues of market access in China and the level playing field.  China has too many restrictions on foreign investment that keep out American companies in a variety of sectors such as agriculture, financial services, and information technology.  American companies need to be able to compete fairly in China’s economy, not in China’s stock market.  Completing the negotiations on a high-standard bilateral investment treaty would be the best thing to help US companies sell more in China.”​