Caixin survey shows disconnect between stakeholders on long-term China bets

Pedestrians walk past commercial buildings illuminated at dusk in the Lujiazui Financial District in Shanghai, China. Photographer: Qilai Shen/Bloomberg

There is a disconnect across different stakeholders on the issue of long-term investment bets in China, a recent survey has revealed.

In a bid to support long term investment in Chinese businesses, Canada Pension Plan Investment Board (CPPIB), Hillhouse Capital Group, and Caixin Global hosted a round-table discussion on long-term capital allocation across different stakeholders in the Chinese markets and also commissioned the study.

“The findings of this survey show that corporations in China have long-term aspirations, though this mindset can be impacted by various performance pressures. For instance, we found that while Chinese businesses were reasonably good at thinking long term, the capital markets generally are not, leading to a disconnect,” said Mark Machin, CEO of CPPIB in a statement issued on Monday.

Machin said, nurturing long-term corporate behavior requires concerted and coordinated action among all market participants.

In the survey by Caixin Global and Caixin Insight Group, where 180 listed Chinese companies in 28 industries took part, comprising a total market capitalization of $2.41 trillion, it was found that majority of respondents agree on the importance of stable leadership and incentives aligned with long-term results.

“The survey findings indicate a joint effort is required among all market participants to foster long-term thinking in China,” said Lei Zhang, Founder and CEO of Hillhouse Capital Group.

While Toronto-headquartered pension fund CPPIB is a long-term investor in China, Hillhouse Capital is a firm of investment professionals and operating executives who are focused on building and investing in business franchises that achieve sustainable growth. Meanwhile, Caixin Global is China’s leading provider and source of macroeconomics, finance and business intelligence on the country.

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