More than 75% of foreign capital in the Chinese stock market has left the market.
Haebom
More than 75% of the foreign capital that flowed into China’s stock market in the first seven months of 2023 has withdrawn from the market, as global investors have sold off more than $25 billion in stocks despite the Chinese government’s efforts to restore economic confidence.
Reasons for Foreign Capital Outflow: Traders and analysts pointed out that the lack of strong policy support from Chinese leaders has caused global institutional investors to hold off on buying until the Chinese market’s growth recovers sufficiently. Concerns about a liquidity crisis in the real estate sector and disappointing growth indicators have also fueled foreign capital selling.
Inflows and Outflows: Foreign investors bought Chinese stocks at a record pace in early 2023, expecting the country to lift its “zero-corona” policy and see an economic recovery. However, they sold off strongly in the following months, and net foreign inflows this year are expected to be the lowest since 2015.
Comparison with other countries: Foreign capital has inflowed $12.3 billion and $6.4 billion into the Indian and Korean markets respectively this year. On the other hand, the Chinese stock market has fallen further, while stock indices of other Asian countries have risen.
The Chinese stock market experienced a large outflow of foreign capital in 2023. This was due to China's economic policies, problems in the real estate market, and global investors' uncertainty and lower expectations for economic recovery. The future performance of the Chinese stock market will likely depend on the Chinese government's economic support policies and the recovery of global investor confidence.
Interestingly, Japan is taking full advantage of this. Foreign capital from China, such as Japan and Indonesia, is emerging as a new investment destination, seeing stable assets and growth potential. In fact, I recently visited Tokyo and could feel a healthy and hopeful atmosphere, quite different from the old Japan of the lost 00 years.
The money that has been missing from China is currently spreading rapidly to Japan and Southeast Asia, and it seems that properly attracting this money to Korea would be a great help in recovering the domestic economy. It is already a little late, but...
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