Chinese middle class expects yuan to decline amid trade war, eyes offshore investment to secure wealth
- Poll conducted for Bank of Communications finds number of households planning to buy foreign-currency assets has risen by 4 per cent
- Respondents have shown cautious stance on economy, investment prospects, analyst says
Chinese households expect a weaker yuan amid a tit-for-tat US-China trade war and are increasingly looking at offshore investments to safeguard their wealth against a slowing economy and stuttering stock market at home, according to a survey released on Tuesday.
The poll, conducted by market research firm Nielsen for Bank of Communications (Bocom) every two months, found that 26 per cent of 1,830 respondents planned to buy assets denominated in foreign currencies in the coming six months.
The survey was conducted in May, after US President Donald Trump raised tariffs on US$200 billion worth of Chinese goods from 10 per cent to 25 per cent. In the previous poll, conducted in March, 22 per cent of households said they were planned to invest in foreign-currency assets.
The increase is in line with their lower buying interest as far as overall liquid investment products are concerned, Bocom said. A bank index gauging respondents’ interest in liquid assets including stocks, bonds and investment funds, slumped by 4 points to 136.
A Bocom index tracking household interest in investment activity slipped two points to 121.
“Despite stable domestic economic growth, rising geopolitical uncertainties are ratcheting up pressure on the Chinese economy,” said Tang Jianwei, chief macro analyst at Bocom.