- Foreign investors are shunning Chinese assets as the country’s economic recovery falters.
- They sold $188 billion worth of stocks and bonds between December 2021 and June 2023, according to Bloomberg.
- These capital flows come as Beijing struggles to consolidate a crisis-hit real estate sector and revive growth.
International investors have started to shun Chinese stocks and bonds, as the world’s second-largest economy stumbles after three years of COVID-free lockdowns.
Foreign traders withdrew $188 billion from the country’s stock and debt markets between December 2021 and June 2023, according to Bloomberg data, a drop of 17%.
China’s flight comes as Beijing faces a number of economic problems, including weaker-than-expected growth, a falling renminbi and a real estate market that has spent the past two years from one crisis to the next. .
International investment has also likely dried up due to the tough policies of President Xi Jinping, whose third term coincided with bans on U.S. semiconductor companies like Micron and a regulatory crackdown that wiped out an estimated $1.1 trillion. of dollars in the market value of large local technology companies. businesses.
“Avoid[ing] China has become one of the top priorities for investors this year due to these issues, according to a recent Bank of America survey.
Just 15% of top money managers surveyed by the bank expect Beijing to roll out a “bazooka” stimulus plan that would revive the economy and give stocks and bonds a much-needed boost, a team of researchers wrote strategists led by Michael Hartnett in a statement. research note last week.
China’s flagship stock index, the CSI 300, has suffered from this exodus, down 23% since the start of 2022. The American benchmark index, the S&P 500, has only fallen 5% over the same period. period.
Meanwhile, fixed-income investors have also started to dump Chinese government bonds en masse – withdrawing about $26 billion from the asset class so far this year, according to Bloomberg.
- Foreign investors are shunning Chinese assets as the country’s economic recovery falters.
- They sold $188 billion worth of stocks and bonds between December 2021 and June 2023, according to Bloomberg.
- These capital flows come as Beijing struggles to consolidate a crisis-hit real estate sector and revive growth.
International investors have started to shun Chinese stocks and bonds, as the world’s second-largest economy stumbles after three years of COVID-free lockdowns.
Foreign traders withdrew $188 billion from the country’s stock and debt markets between December 2021 and June 2023, according to Bloomberg data, a drop of 17%.
China’s flight comes as Beijing faces a number of economic problems, including weaker-than-expected growth, a falling renminbi and a real estate market that has spent the past two years from one crisis to the next. .
International investment has also likely dried up due to the tough policies of President Xi Jinping, whose third term coincided with bans on U.S. semiconductor companies like Micron and a regulatory crackdown that wiped out an estimated $1.1 trillion. of dollars in the market value of large local technology companies. businesses.
“Avoid[ing] China has become one of the top priorities for investors this year due to these issues, according to a recent Bank of America survey.
Just 15% of top money managers surveyed by the bank expect Beijing to roll out a “bazooka” stimulus plan that would revive the economy and give stocks and bonds a much-needed boost, a team of researchers wrote strategists led by Michael Hartnett in a statement. research note last week.
China’s flagship stock index, the CSI 300, has suffered from this exodus, down 23% since the start of 2022. The American benchmark index, the S&P 500, has only fallen 5% over the same period. period.
Meanwhile, fixed-income investors have also started to dump Chinese government bonds en masse – withdrawing about $26 billion from the asset class so far this year, according to Bloomberg.
