China has released its new five-year development plan for 2026 to 2030, outlining priorities in innovation, reform, and sustainable growth. As the blueprint charts the next phase of China’s economic modernization, global investors are watching closely to see how it could reshape the country’s financial landscape and influence global capital flows. Li Shuang spoke with a leading asset manager about China’s evolving position in international investment portfolios. “Mr. Castelli, you work closely with central banks and sovereign investors worldwide. Give us your take on China’s evolving role in global sovereign portfolios today.” MASSIMILANO CASTELLI Head, Global Sovereign Markets Strategy and Advice “Well, thank you for the question.
China is a very important economy in terms of size and of course in terms of its capital market. The share of RMB denominated assets in the portfolio of central banks and sovereign institutions in general has been growing over the last few years. If I may say, if I look at the last ten years, we had a very big rise from 2015 when the RMB was included in the SDR basket. It actually started from almost zero to up to around the three and a half percent. Then over the last few years we saw some slow down, but actually, in 2025 over the last few months, we start to see positive signs of resuming of this trend.
There is more interest about China both in fixed income, which is largely what the central banks are normally investing, but also in the equity market. I think we are at the beginning of this positive trend for China, and I believe that is sustainable, particularly if we continue to see improvement in the Chinese economy and progress in reforms which as far as I can see in these days reading the newspaper in China, that you’re doing the plans for the next five years, it is actually happening.” “China’s recent 4th Plenary Session outlined steps to modernize governance and strengthen financial regulation. From a global market’s perspective, what signals do these developments send to investors?” “I think that a steady path of reform in China is very important for continuing to attract capital into the Chinese capital markets.
And if I look at the plans that you mentioned being in these days, there is definitely this continuous focus on attracting capital in the key sector of the Chinese economy. This is more about the equity market, but just think about the green transition or high tech, semiconductors, artificial intelligence. There is a very strong story of China catching up with the US in tech, and this is definitely an area where I think investor are looking at the moment. Finally, you look at the performance of the Chinese stock market. I was reading today that actually yesterday the Chinese store market passed the peak of 2015 once again. This is a very positive sign because so far, we saw diversification away from the US assets. Because investors want to have more diversified portfolio.
This diversification mainly involves Europe and Japan and other advanced economy. Now we are starting to see this trend to broaden to China and the emerging market. So, definitely, China has an opportunity that I’m pretty sure it will grasp in the future as this capital flows continue.”
SOURCE: CGTN News