Almost seven in ten (68%) expect China to revalue the yuan by a few percent or less against the dollar, rather than a surge like the yuan’s roughly 20 percent rise between 2005 and 2008.
While the largest percentage of those surveyed say China’s economic growth will provide a bigger market for exports from other nations, some investors worry that China’s rise will hurt labor markets in competing nations, and a quarter of respondents expect a stronger China will push up oil and agriculture prices.
More than half of respondents (57%) in the Bloomberg Global Poll say they are bullish about China’s prospects for long-term investments, in contrast to about a third of investors (32%) who take a bearish view. They split more evenly over how China’s ascent will affect other major economies.
China overtook Japan in the second quarter as the world’s second-largest economy, and it is the second largest U.S. trading partner. Along with Brazil, China led the list of most attractive investment locations in the survey, with 33 percent of investors citing it as the country with the best opportunities over the next year.
Investors see China’s prospects as better than those of its neighbor, Japan, which 30 percent of respondents cited as the worst place to invest over the next year. At the same time, many expected that Japan’s efforts to weaken its currency won’t bear much fruit.
Four out of 10 investors (41%) expect the yen to appreciate against the dollar in the next year, even though Japan intervened last week in the currency markets for the first time since 2004. About a quarter of respondents (24%) expected the yen would remain about the same against the dollar, and another 25 percent predicted some depreciation.
