How Ping An CIO 'reads between the lines' to decipher China policymaking

The investment chief of the Chinese life insurance giant shares how he understands China's policy-driven market by reading between the lines from public remarks made by policymakers.
How Ping An CIO 'reads between the lines' to decipher China policymaking

Ping An Group holds a constructive view of China’s financial markets and sees a lot of investment opportunities in China in 2023 and beyond, according to chief investment officer Benjamin Deng. 

The CIO thinks China’s common prosperity goal will be a growth engine for sectors such as consumption and infrastructure, stressing that China is a policy-driven economy.

Benjamin Deng,
Ping An Group

“China is in the early stage of recovery — whether you call it hard recovery, strong recovery, or soft recovery. It's in the early stage,” Deng said.

"The economy has come out of the trough, and we saw a very strong recovery in the first quarter. But now things are slower than before, and we're waiting for the next wave to come,” the investment chief told a keynote interview at AsianInvestor’s 18th Asian Investment Summit on May 18.  

On the contrary, Deng noted that the US and Western economies have come off the peak, into the early stages of an economic slowdown.

“Whether it's going to be a recession, hard landing versus soft landing, that's up to debate,” Deng said.

“But I think a soft landing is more probably an outcome for today's environment. If you look at the interest rates, the US rates and China rates have just crossed each other,” he added, noting that the relatively loose monetary policy in China makes Chinese assets more attractive than before.

“So, at this moment, I think we hold a constructive view on China's equity market and broadly speaking, financial markets. I think there are a lot of opportunities in China,” Deng said.

This includes low-volatility, high-dividend stocks in the onshore market.


By the end of 2022, Ping An's total assets under management (AUM) in insurance funds was Rmb4.37 trillion ($621.8 billion), growing by 11.5% compared with 2021. Approximately 95% of the AUM was invested onshore.

Talking to the offshore audience in Hong Kong, Deng stressed that China is a policy-driven economy, and investors should follow policymakers’ remarks closely to find out where the economy and the financial markets are going.

Deng shared that he tries to catch the first half of the 30-minute Xinwen Lianbo, China Central Television's prime-time news broadcast, every night at 7pm to help him get policy direction by “reading between the lines”.

He recalled that more than 10 years ago, he saw on the broadcast that China’s then prime minister Wen Jiabao went to a university and asked the students whether the price of food had come down.

By reading that line from the news, he got the clue that central bankers were thinking inflation had come down, and it was time to cut rates. And that was when Deng precisely forecast the central bank policy; he was at AIA back then.

“These are the small things we can do by reading the policies. It’s a very policy-driven economy,” Deng said.

“It's an art more than science,” he added.


Speaking of the current policy environment, Deng thought that common prosperity is a key driver for China’s consumer sector growth.

Common prosperity is not a new idea in China, but it was prioritised by Chinese President Xi Jinping in early 2021 as one of the most important policy agendas of China, in order to alleviate poverty and reduce inequality.

Ever since the concept was emphasised, foreign investors have been trying to understand its implications for the financial markets, especially in the private sector.

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Deng thinks common prosperity means more purchasing power from more ordinary Chinese consumers.

“Common prosperity, coming after poverty alleviation, has given the farmers and a lot of the common Chinese people more purchasing power. And that's really the foundation for my optimism in terms of consumption. Not only for this year but for years ahead,” he said.

“You can have one or two rich people or billionaires spending some money on cars and houses. But I would rather see 1.4 billion people spending a little bit, each person, on something,” Deng said.

“That’s what common prosperity really means for investors like me. I like to see the consumption sector going up, which will lead other sectors to follow,” he added.

In addition, as China’s urbanisation deepens from first and second-tier cities to less developed inland cities such as Guizhou and Yunnan province, Deng noted that common prosperity also means infrastructure will continue to play a crucial role in the economy and facilitate greater mobility and trading capacities.

“That's really what infrastructure means for investors like us,” Deng said.

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This year, Ping An is holding positive views on commercial real estate, industrial parks, and infrastructure investments that are generating long-term, stable cash flows. It is also positive about private equity investment.

“We're allocating more to these alternatives,” he said.

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