[i3] Equities Webinar with PineBridge Investments | China: A ‘Known Unknown’ Risk in Equity Portfolios

China: A ‘Known Unknown’ Risk in Equity Portfolios


The recent cascade of new regulations, impacting a wide range of sectors from fintech to property and private tuition, was widely perceived as a retrograde move by the government.

With the economy largely market-driven over the last four decades, these sudden moves have taken equity markets by surprise.

In this equities webinar co-hosted with PineBridge Investments, we discussed how investors could mitigate China policy risk in the same way as all other risks considered to be “unremunerated”.

In addition, we addressed:

  • The fallacy of risk diversification vs risk replication
  • The problems with vendor-driven market segmentation
  • Idea generation: Can there be a differentiated approach to owning the benchmark?
  • Policy reforms and societal needs: Why ESG issues matter in stock selection

Transcript (with timings)

3:25 – China’s current approach to ‘common prosperity’: Why the market is wrong

7:04 – Understanding the long-term goal of the regulations in China

7:56 – Difficulties of the ‘three mountains’

8:52 – China’s 2025 goals for income equality are ambitious.

12:31 – Income redistribution in China is a different concept to say France.

13:44 – The domestic economy in China will benefit from the reforms.

14:36 – Chinese government policy risk is real. How can investors quantify that in the near term?

19:31 – The VIE (variable interest equity) structure for Chinese companies has some question marks

21:33 – Impact of the US Fed’s policies on China

26:16 – You don’t need to invest in Chinese companies to invest in China

27:57 – How do investors obtain sufficient Chinese exposure whilst deviating from the benchmark

30:19 – Risk diversification vs risk replication

34:23 – Pros and cons of investing in the technology sector

37:26 – Instances of governance failure with some fintech companies

39:16 – What about Taiwan?

43:02 – Dependency: China vs other large economies



  • Anik Sen, Global Head of Equities, PineBridge Investments
  • Rob Hinchliffe, Portfolio Manager & Head of Global Sector Cluster Research, PineBridge Investments


  • Teik H. Tan, Executive Director, Investment Innovation Institute [i3]