CIC’s Zhao Haiying At #SALT2017: We Are in a Paradigm Shift

May 17 2017 | 1:41pm ET

Dr. Zhao Haiying, chief risk officer of China Investment Corporation (CIC), argued that investors need to recognize three major factors impacting global markets and buying opportunities.

During a panel discussion at the 2017 SALT Conference, she said these factors were driving a paradigm shift around the globe:

  1. The new macro normal with low-risk, free rates, and high debt levels.
  2. The ongoing technological change that she believes will be more profound than the industrial revolution.
  3. The role of China, which has the second largest economy and is now the largest contributor to global economic growth.

Her comments came during a panel discussion with George Hornig of Transatlantic Financial Holdings Teresa Barger of Cartica Management, and Morris Mark of Mark Asset Management.

The CIC executive also said that China’s retail sector is facing similar pressures from technology witnessed in the United States, where 46% of all jobs in the industry disappeared between 2001 and 2016.

“Like any other country, we are facing a lot of challenges,” she said. “One challenge is common, which is technological change. [Fewer] people are traveling to shopping malls,” she said, stating that those who still do are visiting for the experience-based consumption in restaurants and playgrounds. “Even though [technology] is bringing efficiency benefits, it is creating a lot of challenges.”

Haiying also stated that digital payment networks offered significant opportunity for investors on the global front. She discussed the increasing role of Tencent and Alibaba in a Chinese mobile-payment market that is worth $5.5 trillion. This figure is 50 times larger than the size of the U.S. market.

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