- China’s stock market has seen net selling for a record six straight months, Bloomberg data shows.
- Foreign investors have fled amid economic problems and a tepid policy response from Beijing.
- In January, global funds sold $2 billion worth of Chinese equities.
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January marked the sixth consecutive month foreign investors were sellers of Chinese equities, according to a Bloomberg report.
Last month, global funds sold 14.5 billion yuan worth of stocks — about $2 billion — and Beijing has yet to offer any policy solution to reverse the outflows.
Chinese equities have shed roughly $6 trillion in market value since peaking in 2021.
The post-pandemic economic rebound never fully materialized for China, and instead, it’s had to contend with severe real estate trouble, deflation, and fresh demographic challenges including an aging population and historic youth unemployment.
“You have an uber-bearish narrative around China that is proving very difficult to dislodge,” Nicholas Spiro, a partner at Lauressa Advisory, told Business Insider in a recent interview. “China is emphatically out of favor with global investors.”
On January 22, Bloomberg reported that Chinese authorities were weighing a rescue package for stocks worth as much as $278 billion, pulled primarily from offshore accounts of state-run firms.
Yet experts told Business Insider that even sizable initiatives may not bring bears clamoring back to China. The bleak outlook stems from China’s real estate market, which accounts for the majority of household wealth in the country.
With property values depreciating, people’s willingness to spend has also deteriorated, as has sentiment across the economy and markets. Deep-seated structural issues in real estate, experts say, make it difficult to envision what has to happen for investors to regain confidence.
