
Taiwan gets boost as foreign capital flees China
China is seeing a surge of capital flight as it grapples with a slowing economy. Since this January, foreign investors have withdrawn NT$5.75 trillion from China’s stock market. Some of those funds have made their way to Taiwan. Analysts say that as China’s economic woes continue to deepen, foreign investors will increasingly seek new places to park their cash.
With China’s export orders on the decline, many factories have closed up shop, dealing a blow to worker income. The nation’s economic slowdown has promoted an exodus of foreign investment.
Chinese analyst
On one hand, foreign investors are pouring out via the Shanghai–Hong Kong Stock Connect and Shenzhen–Hong Kong Stock Connect. On the other, they’re also shorting A-shares, saying A-shares won’t make it. Though the government says there is no problem, it is still launching response measures. Even then, the market isn’t rising, so most investors don’t believe what the government says.
Chinese analyst
At this point, chanting slogans cannot fix the fundamental problems of the capital market. Institutional and retail investors have long been lying in the intensive care unit.
China’s property crisis has spilled over to many parts of the broader economy, threatening investor confidence. In August alone, foreign investors withdrew US$12 billion, or about NT$380 billion, from China’s stock market, setting a new monthly record. Over the past year, foreign investors have sold off more than US$180 billion, or about NT$5.75 trillion.
Hsien Chen-yeh
Analyst
The CCP is changing its policies daily, and its attitude to foreign investors hasn’t been especially friendly. This has all had an impact on the willingness of foreign investors to invest in the Chinese stock market. Of course in this exodus, some of the capital has been redirected to Taiwan. We can see very clearly, that this year AI-concept stocks have benefited. That’s in stark contrast to Chinese shares.
Amid China’s slowing economy and uncertain future, foreign investment is pulling out, providing a boon to Taiwan’s capital market.
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2023-09-18