Investors withdrew more than $9 billion from Chinese blue chips in two weeks

Global investors are massively getting rid of the shares of the largest Chinese companies. According to Bloomberg, the outflow of foreign capital from the shares of companies represented in the CSI 300 has been going on for 12 days in a row, which has become a record for the entire period of statistics, that is, since 2016. In total, from August 7 to 18, foreign investors withdrew $9.3 billion from Chinese companies. And as Bloomberg notes, this trend is likely to continue in the near future.

China’s largest alcoholic beverage producer, Kweichow Moutai, suffered the biggest losses during this period. Foreign investors sold its shares for 6.2 billion yuan ($851 million). LONGi Green Energy Technology and China Merchants Bank are next in terms of outflow, with 4.7 billion yuan each. Wuliangye Yibin, another major liquor maker, Ping An Insurance Group and electric car maker BYD are among the top sellers.

According to the agency, foreign investors massively bought shares of Chinese companies in July, believing that the authorities will be able to spur the country’s economy, which is not recovering from the COVID-19 pandemic as quickly as expected. But all the latest reports of economic data turned out to be negative. Do not add optimism to investors and news about the possible default of the country’s second largest developer Country Garden Group. The real estate market is one of the key ones for the Chinese economy, and it has been in a fever since 2021, when Evergrande, the main developer of China, began to have serious problems. In August, he applied for bankruptcy in USA.

Kirill Sarkhanyants