Foreign investors pulled $8.8 billion from Chinese financial markets last month as stocks slumped, according to estimates from the Institute of International Finance, reports Bloomberg. Outflows from China’s equity market reached $7.6 billion while $1.2 billion was removed from bond markets, the estimates show. That was more than in September, when a combined $2.1 billion of foreign portfolio investment left.
The estimates confirm local exchange data showing how unpopular onshore financial instruments have become with foreign investors as COVID-Zero controls and a housing crisis hurt the economy and geopolitical concerns also sap sentiment. Outflows from stocks have continued so far this month despite a strong rebound from the historic rout in October.
“The shift to outflows in 2022 is notable and reflects lots of discussions in the asset management community,” Jonathan Fortun, an economist at IIF wrote in a release. “This shift reflects geopolitical concerns and anxiety that the government’s zero COVID policy could weigh on China in the medium term.”