Despite ongoing China-U.S. trade tensions, Morgan Stanley is upbeat about the potential of the Chinese economy in the long term, and sees increasing global investor interest in the country.
"China has a massive population and its GDP per capita is still relatively small. So there's tremendous potential to continue to improve the lifestyle of Chinese citizens," said James Gorman, chairman and CEO of the New York-based investment bank, in an interview with Xinhua.
The Chinese economy posted better-than-expected growth of 6.4 percent in the first quarter of this year, showing positive signs of stabilization.
Gorman said it remains to be seen how much the trade talks will affect China's economy, but in the long term, the country's economic growth will remain strong.
He said that China had achieved tremendous success in terms of its economic progress over the last several decades and that its transformation will not stop.
Moreover, he noted that global investors continued to see attractive opportunities in the Chinese market.
According to the bank, the number of investors attending Morgan Stanley's China Summit, the bank's annual event for promoting investment between investors and corporates, hit a record high this year with some 1,900 participants including over 1,000 global investors and 600 senior leaders from leading companies both public and private.
Gorman said that investors will continue to view China "through the lens of two or three decades rather than seeing it just in the context of the next couple of months around the negotiation table." Therefore, the Chinese market remains attractive for global investors due to its scale and the level of economic progress.
Morgan Stanley has completed over 200 IPOs for Chinese companies in the international stock markets, raised over 330 billion U.S. dollars of equity financing and advised on 560 billion U.S. dollars of China-related mergers and acquisitions (M&As) transactions since it entered China in 1994.
The bank is celebrating its 25th anniversary in China this year and it remains committed to the country, said Gorman.
Gorman said the bank takes "a very long term view" of its operations in the country. The bank will continue to play a critical role in helping China attract investment and helping Chinese companies go global.
He also said Morgan Stanley will continue to increase its shareholdings in its joint ventures in China as the Chinese government has allowed foreign companies to take majority control of securities and asset management entities to further open up the financial sector.
However, he did warn that factors including the ongoing trade frictions were causing a high level of uncertainties which resulted in a "fragile" market sentiment that could accelerate a global slowdown.
Given the size and interdependency of the world's two largest economies, it is very important for China and the United States to find rules of engagement and get the trade disputes resolved without triggering a global trade war, Gorman said.
