Chinese stocks rebounded on Monday morning after Beijing rolled out a series of measures aimed at stemming a nearly month-long slide. But the rally proved short-lived, as foreign investors took the opportunity to dump $1.1 billion in mainland Chinese stocks. Bloomberg data.
China’s CSI 300 index , which tracks the performance of the 300 largest companies on the Shanghai and Shenzhen stock exchanges, rose 5.5 percent on Monday before giving up most of those gains to close just 1.17 percent higher.
Over the weekend, Chinese authorities halved the tax levied on stock trades, known as “stamp duty,” and lowered the amount of collateral traders must deposit when they borrow money to invest in stocks to “boost investor confidence,” according to Google Translate statement from the Ministry of Finance of China. Beijing also ordered some mutual funds to avoid becoming net sellers of stocks, Bloomberg reportciting unnamed sources.
Despite these moves, foreign investors continue to flee the Chinese market.with Beijing crack down The U.S. has cracked down on foreign consultancies amid tensions between China and the U.S., and has repeatedly asked investment firms to avoid sell stock Investors appear to be increasingly concerned about the risks of holding capital in China when markets look shaky.
Number of active Chinese hedge funds falls in first half of year first more than ten years. Data released by China’s State Administration of Foreign Exchange on Friday showed that direct investment liabilities, a measure of foreign direct investment inflows into China, fell 87% in the second quarter from a year earlier to $4.9 billion, a record low.
China’s post-COVID-19 recovery has been weaker than expected, with lingering economic problems including a housing crisis, high youth unemployment, $13 trillion Local government debt and industrial decline profit– also contributed to a slowdown in foreign investment in the country.
“The changes in global capital flows are dramatic,” Robin Brooks, chief economist at the Institute of International Finance, wrote in an essay on Sunday. postal on X.com. “China has attracted massive capital flows to emerging markets over the past decade, often at the expense of other BRICS countries. massive capital outflows.”
In a broader sign that China is becoming less investor-friendly, its millionaires are leaving the country in droves amid a regulatory crackdown on large private companies.country will Losses record 13,500 There will be millionaires this year, according to estimates in the latest Private Wealth Immigration Report by immigration consultancy Henley & Partners. Before that, some 10,800 millionaires will be lost in 2022.
Repair a broken relationship?
Against this backdrop, Commerce Secretary Gina Raimondo visited Beijing on Monday, seeking to mend broken relations between the two countries.Raimondo and Chinese Minister of Commerce Wang Wentao agree The formation of a group “to seek solutions to trade and investment issues” after hours of discussions signaled a shift in Washington’s attitude toward China.
“The world is counting on the United States and China to manage and maintain our commercial relationship responsibly,” the commerce secretary said, adding, “This means we can have more transparent dialogue.”
Just days before Raimondo’s visit, the Commerce Department deleted Twenty-seven Chinese companies have been added to a list prohibited from buying U.S. technology.
Chinese Ministry of Commerce is called The statement called the move “beneficial to normal trade between U.S. and Chinese companies,” adding that it was now “entirely possible to find a solution that is beneficial to companies on both sides.”
Wang also sounded positive after meeting with Raimondo on Monday. He told the U.S. Secretary of Commerce: “I am prepared to work with you to create a more favorable policy environment, strengthen cooperation among our businesses, and promote bilateral trade and investment in a stable and predictable manner.”
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