MMJamesLord,MinDai,SheenaShah,KelvinPang,DavidAdams,MatthewHornbachandChunHimCheungarefixedincomestrategistsandarenotopiningonequitysecurities.RobinXing,JennyZheng,ZhipengCai,DanieleAntonucciandJanKozakareeconomistsandarenotopiningonanysecurities.Theirviewsareclearlydelineated.Duetothenatureofthefixedincomemarket,theissuersorbondsoftheissuersrecommendedordiscussedinthisreportmaynotbecontinuouslyfollowed.Accordingly,investorsmustregardthisreportasprovidingstand-aloneanalysisandshouldnotexpectcontinuinganalysisoradditionalreportsrelatingtosuchissuersorbondsoftheissuers.MorganStanleydoesandseekstodobusinesswithcompaniescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanleyResearch.InvestorsshouldconsiderMorganStanleyResearchasonlyasinglefactorinmakingtheirinvestmentdecision.Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthememberandmaynotbesubjecttoNASD/NYSErestrictionsoncommunicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.EMStrategyandEconomicsTheTransformationofChina'sCapitalFlowsWebelieveChinawillopenitsmarketstoforeigncapital,withthecurrentaccountmovingtoastructuraldeficit.PrivateandreservemanagerportfolioinflowsshouldrisewellaboveconsensusexpectationstoUS$150-225bnin2019andUS$200-380bnover2020-30.WearebullishonHKEXandCNY.February11,201909:00PMGMTMMEMStrategyandEconomicsTheTransformationofChina'sCapitalFlowsCapitalinflowstoChinatoaccelerate:China'seconomyissettobecomemoredependentonforeigncapital,givenitsstructurallydecliningcurrentaccountposition.Indeed,2019islikelytoseethefirstannualcurrentaccountshortfall(0.3%ofGDP)since1993andwilllikelybethebeginningofasustainedperiodofdeficits.Asaresult,weexpecttheauthoritiestoincreasinglyopenuptoforeigncapitalandportfolioflowsinparticular...
