- Foreign investors are staying away from Chinese assets as the country’s economic recovery falters.
- According to Bloomberg, they sold stocks and bonds worth $188 billion between December 2021 and June 2023.
- The outflows come as Beijing struggles to prop up the troubled property sector and revive growth.
International investors have started to shy away from Chinese stocks and bonds as the world’s second-largest economy faltered after three years of zero-Covid lockdowns.
According to Bloomberg data, foreign traders pulled out $188 billion from the country’s equity and debt markets between December 2021 and June 2023 – representing a decline of 17%.
Beijing faces a host of economic issues taking off from China, including lower-than-expected growth, a declining renminbi and a property market that has lurched from one crisis to another for the past two years.
International investment is also likely to decline due to the harsh policies of President Xi Jinping, whose third term in office has led to sanctions and a regulatory crackdown on US semiconductor companies like Micron, wiping an estimated $1.1 billion from the market value of local Big Tech. Trillions have been wiped out. Companies.
“Avoid[ing] As a result of those issues, China has become one of the main priorities for investors this year, according to a recent survey by Bank of America.
A team of strategists led by Michael Hartnett wrote in a letter that just 15% of top fund managers surveyed by the bank expect Beijing to introduce a “bazooka” stimulus package that would revive the economy and boost stocks and Will give the bond a much needed boost. Last week’s research note.
China’s main stock-market index, the CSI 300, has suffered an exodus, falling 23% since the beginning of 2022. America’s benchmark, the S&P 500, is down just 5% over the same period.
Meanwhile, fixed income investors have also begun abandoning Chinese government bonds en masse – about $26 billion has been pulled from the asset class so far this year, according to Bloomberg.