Macro View

Fasten your seatbelts

  • Published 04 Nov 2010

Potential capital inflows from a probable US QE2 could exacerbate liquidity challenges, just as China is showing signs of wanting to reassert control.

Things are starting to feel a little giddy. The chances of the US embarking upon another round of Quantitative Easing (QE) are strengthening, raising the possibility of another wave of liquidity bound for Chinese assets in Hong Kong and the mainland. Leaving aside Beijing's likely condemnation of a QE2 (which itself would sharpen 'currency war' tensions), the prospect of greater capital inflows into China, Hong Kong, Taiwan and other Asian nations presents investors with a dilemma. The prospect of a liquidity-fuelled rally for many asset classes is real, but should investors shun such opportunities out of concern that bubbles are once more inflating? Only investors themselves can answer.

Issue icon

Latest Issue

17 May 2012

Browse the archive

Subscribe now to access all of China Confidential

China Confidential Funds

China Confidential Funds, a new research service launched by FT China Confidential, is dedicated to illuminating the mainland fund industry. Our team of fund industry experts in Shanghai search out the interesting trends in fund performance, strategy, interactions with overseas funds, regulatory changes, distribution and management. We also use a proprietary system to track the emerging flows of Chinese money. Click here to find out more.

Find out more