Why Temasek continues to invest in China amidst risks

Temasek revealed how it addresses two specific risks they see in China.

Investment company Temasek said there are two types of risks to China: cyclical slowdown and regulatory risks.

These risks, however, will not hamper the company from investing in China since “most of the areas” they are looking at in the country continue to be relevant for them.

The company’s Chief Investment Strategist Rohit Sipahimalani told Nikkei Asia that risks such as the cyclical slowdown is “nothing new” and is something the company can “ride through.”

As for regulatory risks, Sipahimalani said issues that China is trying to address such as data privacy are also “what other governments around the world are trying to do.”

“Just that in China the way that is being executed is a little more blunt and quick, and that is why it has created a lot of shocks out there,” the Temasek strategist said in his interview that was released by Temasek.

In response to this risk, Sipahimalani said the company will “probably wait” before deploying more capital in spaces that need regulatory clarity like internet platforms.

Sipahimalani said the company has to know what they need to do to comply with China’s policies so they could assess properly.

“Outside of that space, there are other spaces that we focus on in China in line with our global themes in terms of longer lifespans, in medtech, biotech, healthcare services that continue to be in line with government policy and continue to see a huge amount of opportunity, and we continue to invest out there,” Sipahimalani said.

These spaces, according to the strategist, are “very high growth areas” which are supported by Chinese policy.