China remains investible despite skepticism, says veteran financier Fang Fenglei

Fang Fenglei, the financier who helped establish China International Capital Corp. with Morgan Stanley in the early 1990s, has dismissed arguments questioning China's investment appeal as fundamentally flawed.

The chairman of Hopu Investments addressed persistent debates over whether China remains "investible," stating that such arguments "do not hold water". His remarks come as foreign investors continue to grapple with divergent views shaped by sector-specific concerns, political factors, economic conditions and cultural influences.

Three Decades Shaping China's Capital Markets

Over the past three decades, Fang has occupied pivotal positions in China's financial evolution. After working with Morgan Stanley to create the country's first joint venture investment bank, China International Capital Corp., he moved at the start of the millennium to spearhead the listing of state-owned giants in Hong Kong as CEO of Bank of China International. He later chaired a China joint venture with Goldman Sachs before taking his current role at Hopu Investments.

Practical Models for Foreign Operations

Fang pointed to concrete arrangements that enable multinationals to maintain stable operations in China through equity-related and governance-oriented partnerships with Chinese entities.

Starbucks' joint venture with Boyu Capital represents one such model, with Boyu holding a 60 per cent stake while Starbucks retains 40 per cent and keeps ownership of the brand's intellectual property rights. Similarly, McDonald's China operates under an arrangement where a Citic-led consortium holds 52 per cent and McDonald's owns 48 per cent.

Fang's assessment comes amid ongoing foreign discussion that China's economy has peaked, reflecting the varied risk appetites and standpoints among international institutions evaluating the market.

Source: South China Morning Post