China investment train rolls on, despite U.S.

By CNN's Nic Hopkins

HONG KONG, China -- The China investment juggernaut will not be tripped up by a souring of ties between the U.S. and China, says one of Asia's leading economists.

Kenneth Courtis, the vice-president for Asia of U.S.-based financial services giant Goldman Sachs, says the enthusiasm to pour fresh capital into China far outweighs any negative effects from the souring of U.S.-China relations.

"My sense is that broadly, international investment is maximum bullish on China," Courtis told the Fortune Global Forum in Hong Kong.

Courtis said China was considered too attractive a prospect by global investors for them to be swayed by the negative perception of Beijing by Washington.

He said China attracted 20 percent of the world's direct annual foreign investment, which was "second only to America".

"I don't believe anything has been knocked off course because of the hard rhetoric across the Pacific," he said.

Courtis cited the incredible growth being witnessed in Shanghai as reason enough for foreign capital to continue to pour into China.

Shanghai 'unequalled'

"Shanghai will be a marketplace that will be unequalled anywhere in the world," he said.

For an investment bank such as Goldman Sachs, Courtis said the appeal of China was self-evident. China's massive population was adding $400 million a year in savings, of which 5 percent was invested in equity markets.

"What happens if that investment grows to 25 percent - well, then you have $100 million a year going into the equity markets," he said.

"At the same time you have tightening of corporate governance regulations, greater protection of minority shareholders' rights and a slow move towards the deregulation of the renmimbi."

"China is going to be one of the most attractive markets for underwriting, for mutual funds," said Courtis.

The Fortune Global Forum is an event organised by Fortune magazine, which is published by AOL Time Warner. CNN is also a unit of AOL Time Warner.

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Goldman Sachs

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