A massive $188 bn exodus shows China's heft fading in world markets
Foreign holdings of the nation’s equities and debt have fallen by about 1.37 trillion yuan ($188 billion), or 17%, from a December-2021 peak through the end of June this year, according to Bloomberg calculations based on the latest data from the central bank. That’s before onshore shares witnessed a record $12 billion outflow in August alone. The exodus coincides with China’s economic slump due to years of Covid restrictions, a property market crisis, and persistent tensions with the West — concerns that have helped make the “avoid China” theme one of the biggest convictions among investors in Bank of America’s latest survey. Foreign fund participation in the Hong Kong stock market has dropped by more than a third since the end of 2020. While China’s weakness was once seen as dragging down the rest of the world, particularly the emerging-markets group, that has clearly not been the case this year. Down about 7% in 2023, the MSCI China Index is staring at a third straight year of losses