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China's financial influence grows ever stronger

Weekly investor research

23 March 2015

China is pushing hard for an ever more prominent role in the global financial system. The support for its AIIB initiative directly challenges the old Bretton Woods institutions and rightly focuses on the single most important constraint to continued Emerging Markets (EM) expansion – developing domestic infrastructure which has failed to keep pace with private sector expansion. China has also taken a significant step by allowing local governments to convert or issue RMB 1.5bn of debt and become a key element of the country’s debt markets. We also review Brazilian, Argentinean and Venezuelan politics and Russia’s economy, which is now adjusting to the policy changes of a few months ago. In the global section we look at slowing US growth and how the FOMC meeting changed little in any meaningful sense and leaves the US in much the same position of high debts and slower growth and in no hurry to hike fast.

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