Investing in China to Generate Returns and Tackle Climate Change

China’s continued rise on the world stage will have a significant impact both on our generation and the next. As hundreds of millions are lifted out of poverty, and China grows to overtake the US as the world’s leading economy by 2028 2 , the investment market will be transformed, both within China and globally. This creates a number of new questions – and opportunities – for investors in China. 1 https://www.reuters.com/article/china-economy-fdi-idUSB9N2PY01M 2 https://cebr.com/wp-content/uploads/2020/12/WELT-2021-final-23.12.pdf . Page8 Investing in China to Generate Returns and Tackle Climate Change Key takeaways Like so many other industries, the corporate investment market has experienced considerable turbulence over the past two years, with consistently low interest rates, bond price volatility, and shareholder demand for returns – as well as the impact of the pandemic. Throughout this period, investors’ priorities have evolved. Firstly, China is becoming increasingly attractive to investors, with foreign direct investment into China surging to 22.3% year on year from January to August 2021 1 . Secondly, investors are becoming more strongly motivated by investment targets’ performance against sustainability metrics, firstly to reflect their own values more closely, and due to the potential for higher, more stable returns linked to strong sustainability performance. Investment in China 1