The Wall Street Journal has recently report that due to China’s economy continuing to stumble and rocky relations with the United States, billions of dollars have been pulled out by international investors citing numerous concerns.
The Shanghai and Shenzhen exchanges in China have seen $24 billion leave the market through a trading link in Hong Kong since August which is the largest net outflow of money from the exchanges since the link was created in 2014. China’s economy reported small growth with a questionable real estate crisis on the horizon and according to the MSCI China Index, where investors look to gauge percent returns on investments, it has fallen by 10% throughout the year.
Alvin Lam is an operating partner for CVC Capital Partners in Hong Kong and recently said, “For every deal we now look at geopolitical risk, regulatory risk even before we start properly evaluating the attractiveness of the business and the business model.”
The Wall Street Journal reported numerous foreign investment firms, especially from the United States, selling off over $170 billion in shares for pension funds, mutual funs and hedge funds and reallocating the money in different countries and sectors.
The trade war between the United States and China continues to escalate particularly involving the use of semiconductors in many consumer products and military applications, artificial intelligence and the stealing of technological research.