Middle East Investors Are Seeking to Include Chinese Currency Assets in Their Investment Portfolio
Middle East Investors Are Seeking to Include Chinese Currency Assets in Their Investment Portfolio
Forbes: “Clients more and more are asking for CNY” – shorthand for the Chinese yuan, says BTA Finance’s Humberto Coelho.
The 2024 Forbes China Middle East Fireside Chat & Drinks was held in Shanghai earlier this month, aiming to connect the commercial resources of both China and the Middle East and talk about the new opportunities brought by UAE’s accession to the BRICS cooperation mechanism.
An article from Forbes titled “Middle East Investors Eye Chinese Currency Assets As Ties Deepen” mentioned how Humberto Coelho, a co-founder of BTA Finance, expressed the growing need he saw from his clients to hold CNY assets at the event. BTA Finance is a corporation based in Dubai that mainly provides wealth management services and manages over 2 billion dollars of wealth. By investing more in assets denominated in CNY, investors may diversify their investments that traditionally focus on assets denominated in US dollars or Euros. Recently, Asia has become a common focus of Middle East investors. The huge size of the Chinese economy and market has provided BTA Finance’s investors with a rich diversity in investment portfolios.
As observed by the CEO of BTA Finance, Middle East clients tend to avoid assets denominated in currencies related to the Group of Seven and wish to invest in the Middle East, China, Brazil, and India and obtain assets evaluated in their local currencies. As we say macroscopically that a multi-polar world is forming, changes have already come to the doorsteps. Within less than 100 days, from the 22nd to the 24th of October, the 16th BRICS Summit will be held in Kazan, Russia. “40 countries have now applied to join BRICS in 2024” according to BRICS News.
The U.S. Department of Commerce Launching Anti-subsidy and Anti-dumping Investigation Towards LSPTVs Made in China
On June 20, 2024, the U.S. Department of Commerce received a countervailing duty petition and an antidumping duty petition concerning certain low-speed personal transportation vehicles (LSPTV) imported from China. The petitioner is the American Personal Transportation Vehicle Manufacturers Coalition, which alleges that the Chinese government is providing subsidies to LSPTV manufacturers resulting in illicit competition with the local industry. During 2023, 135.8 thousand of the investigated vehicles were imported from China to the US, and according to Commerce, the value sold reached 440 million dollars. This number is growing fast, by 2022, it was 330 million dollars, and by 2021 it was 170.
It is not surprising how much American consumers love Chinese LSPTVs, given how long-lasting and useful they are. These vehicles commonly seen in China speed up to 30 miles an hour, some have hydraulic rods to lift cargo, and some have rearview cameras, yet all of them can be bought at a price ranging from 1000 to 4000 dollars.
Although not as fast as a car, large storage spaces, and low prices made these vehicles perfect for American families that don’t live close enough to cities or local supermarkets and professionals who need to carry and deliver a lot. Being a large country with low population density, the United States has long been called “a nation on wheels”. The need for low-speed vehicles like these to go around local neighborhoods is huge yet largely overlooked.
Although suspected by the Commerse to be dumped goods, LSPTVs are only sold for 200 to 1500 dollars in China. Transporting them to the US usually cost much more than buying them, yet when they reach the shore they are still much cheaper than similar products locally produced in the US. How are Chinese manufacturers able to reduce primal costs? The secret lies in more than one aspect. A fully developed supply chain and large production scale have always been some unwavering advantages of many Chinese factories. In recent years, investments and growth in electric cars have led advanced technologies into peripheral industries, which might also play a role in reducing costs and implementing the production of LSPTVs.
If the US government continues to add to the punitive tariff to try to change the current situation, it would not only make them suspects of controlling market prices but also wouldn’t harm Chinese manufacturers who rely mostly on domestic markets. With the vast market in China, the overseas market has never been their priority. Ultimately, American consumers have paid and would have to pay over 90 percent of the increased tariffs imposed on Chinese imports.