As stock markets around the world recover from the pandemic, the focus is shifting to China. According to EPFR Global, money is flowing into mainland Chinese and Hong Kong stocks in ways not seen since 2018. Active foreign fund managers invested $1.39 billion in mainland Chinese stocks and $2.16 billion in Hong Kong stocks in the four weeks ended Jan. 25. The reopening of China from zero-Covid and a more stable macro environment are contributing to the positive outlook. While passive money managers are following the trend, U.S.-based money managers are looking for ways to invest in Chinese companies. However, there are deeper concerns about the market rally's sustainability if U.S. active investors and local investors don't buy in.
How could the current market enthusiasm for Chinese stocks affect global investments and the overall economy?
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