Growing Concerns of Foreign Investors About Chinese Securities

In the first quarter of 2022, foreign investors have reduced their holdings in Chinese stock market by more than $7 billion. Moreover, investors reduced holdings of Chinese bonds by more than $15 billion in March 2022. That was the highest amount reduced from the world’s second-largest bond market.

The reduction in holdings was caused by new coronavirus outbreaks concern and the potential sanction risks on China associated with supporting Russia. Additionally, there is volatility in global markets and the impact of the Russian aggression war on global supply chains.

Some economists estimate cut in investment as a short-term issue more related with increasing cases of Covid-19 and assume that foreign investment will flow back in shortly. Whereas, there are economists who consider tha...

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