Global investors will be carefully analysing the words, actions of Xi and Macron

During the French President’s three-day trip to Beijing and Guangzhou, global investors are ‘desperate for signs’ that China’s Xi and France’s Macron can forge stronger business connections between China and the EU.

The assessment from Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations, comes as a state visit by Emmanuel Macron to China kicked off on Wednesday.

After formal discussions in Beijing on Thursday, which will also involve the president of the European Commission, Ursula von der Leyen, Macron and Xi will go to the southern city of Guangzhou.

The Ukraine conflict, the climate issue, renewable energy, and travel following Beijing’s removal of the zero-Covid limits are reported to be the main topics that will be covered.

Nigel Green comments: “Geopolitical issues are at the top of the agenda for Macron’s visit to Xi in China.

“But as many top business leaders from France have also been invited along, and because Macron will meet with Chinese investors in Guangzhou, there are hopes that international trading relations will also be a major priority. Global investors are desperate for signs that Xi and Macron can secure better business ties between China and the EU.”

China already trades with the EU, which is the latter’s second-largest commercial partner.

The trade deficit was €14.6 billion in January 2021. In September 2022, it peaked at €36.0 billion before dropping to €27.4 billion in December 2022.

Recent events have “reignited” interest among international investors in the second-largest economy in the world.

“The break-up of Alibaba, the Chinese mega-conglomerate, in the last couple of weeks is, we believe, the start of a wave of enormous opportunities in China for investors from around the world,” says the deVere CEO.

“It represents the end of Beijing-led regulatory crackdowns on various sectors, including tech, real estate and education, which have deterred foreign investors from China in the last few years.”

Green continues: “The cooling of corporate crackdowns, and Beijing seemingly becoming more pro-private enterprise, also coincides with the re-opening of the world’s second largest economy following years of Covid restrictions and as the Chinese currency, the yuan, becomes more dominant in international finance.”

Russia’s Vladimir Putin recently said that his nation is now in favour of using the Chinese yuan instead of the US dollar for oil transactions. Additionally, it has been claimed that Saudi Arabia and Beijing are negotiating the usage of the Chinese yuan as opposed to the dollar in oil trades.

“Global investors are increasingly bullish on China and financial markets around the world are hoping for indicators of a strengthening relationship between the European Union (EU) and China during this important state visit.

A stronger relationship would lead to increased trade and investment between the two regions, creating new opportunities for businesses and investors in both regions, leading to access to new markets, and increased profitability and growth. Stronger ties would also reduce uncertainty in financial markets, meaning a more stable and predictable environment for investors,” confirms Nigel Green.

Green concludes: “Global investors will be carefully analysing the words and actions of Xi and Macron over the next few days in order to seize opportunities and sidestep potential risks.”