FXstreet

Over the last two weeks, since the World Economic Forum in Davos, China has been heralded as the world's savior of globalization. The country's leader, Xi Jinping, was the first Chinese president to ever attend the Forum, where he was cheered for touting the wonders of open markets. To many investors, he was a refreshing reminder of the reliable rules of global capitalism at a time when Brexit and Donald Trump are busy rewriting those rules. Yet, according to a number of investors with money at work in China, and surveys by American corporations there, the world's No. 2 economy is as protective as ever. The herald of open market capitalism is hardly open.



"China's markets, even though they have opened in some respects over the last decade, many things are not as open as they used to be," says Rob Lutts chief investment officer of Cabot Wealth Management, a $600 million family office in Salem, Mass. Lutts recently returned from a trip to Beijing and is more bullish than bearish on China. But from his recent talks with both Chinese and American CFOs in the country, the takeaway from both sides is that there is more protection in a number of key Chinese industries. "If you talk to American executives here, they all have a China strategy but are much more concerned today about not being treated fairly than they used to be. This openness that Xi is portraying in Davos...it's good for him to be there and shows China's importance to global trade and the global market, but I would not say that China is any more open today that it was a year ago. I'd say they are more protective of their own businesses than ever."

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