Reuters reports that Chinese investors are racing to pour money into offshore assets as the Chinese government has been unsuccessful in reviving the country's struggling economy.
China's Qualified Domestic Institutional Investor Program, which serves as a vehicle for Chinese investors to buy foreign securities, rose 50% in January from a year earlier, surpassing the $165.5 billion cap set by the Chinese government for the fund. . according to to Reuters. Chinese Premier Li Qiang announced Factors such as deflation, poor household consumption and huge real estate debt have dragged down the economy, which has slowed growth since the coronavirus pandemic, but on Tuesday it announced plans to transform the country's development model to boost growth. We have taken steps to accelerate this. (Related article: More companies are turning to cheap foreign workers as rising costs burden them)
“We see a pressing need from high-net-worth clients to diversify their asset allocation,” Le Long, founding partner of Shanghai-based FR Harvest Asset Management, told Reuters. Ta. “After two decades of high growth and high profits, China's economy will face a slowdown in the near future.”
China was supposed to be the future. So buying Chinese stocks was a great investment idea, right?
and. Yeah. There are ETFs for that.
Not IBIT. pic.twitter.com/7YpAAD17SU— Fred Krueger (@dotkrueger) March 1, 2024
According to Reuters, domestic stock investment trusts fell 35% year-on-year in January alone, the Chinese stock market neared a five-year low, and 30-year U.S. Treasuries hit an all-time low, showing a lack of investor confidence. It is said that investment outflows are occurring amid low sentiment. China AMC, one of China's largest fund managers, was forced last week to cap daily subscriptions by investors to its Huaxia Global Technology Pioneer Hybrid Securities Investment Fund, which offers shares in US tech giants. .
China's economy grew by 5.2% in 2023, but was unable to recover the growth levels frequently seen before the COVID-19 pandemic. The Chinese government has been considering a number of measures to boost growth, including injecting hundreds of billions of dollars in stimulus into the economy and stock market to reverse the current downward trend.
China's economy is also hampered by its debt-laden real estate sector, with the number of real estate foreclosures increasing by 36.7% in 2023 compared to the previous year. Companies responsible for about 40% of China's homes have defaulted on their debts since 2001. .
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