The last three months of world trade have marked a significant decline in investment in Chinese securities. Shares worth 33.2 billion yuan ($4.9 billion) and bonds worth 301.4 billion yuan ($45.03 billion) were sold, according to The Wall Street Journal (WSJ). At the end of 2021, foreign investors had $1.2 trillion in Chinese assets, split equally between stocks and bonds.
The main factor was the tough policy of the Chinese authorities regarding the spread of COVID-19 in the country. This hinders economic growth and creates problems for business development. Also, many investors are afraid of the rapprochement between Russia and China and the resulting geopolitical risks. The authorities of the Celestial Empire promise to support the economy and especially the IT sector.
Recently, the yuan has fallen significantly against the dollar, by almost 5% over the year. The tightening of monetary policy in the US has virtually eliminated the advantage of Chinese bonds over US ones.
Some analysts are talking about a good surplus of Chinese business and that soon investors will return to the Asian market and continue to invest their assets. Others report with pessimism that in the near future it will be necessary to increase the money supply and thereby create pressure on the yuan.