Investors around the world have bought more than $800bn Chinese stocks and bonds at a record pace, despite Beijing’s geopolitical rivalry with international states.
Global investors have poured into Chinese markets, in spite of huge political tensions stemming from Beijing’s repression of Uyghurs in Xinjiang, erosion of Hong Kong freedoms, and battles with the US over corporate audit issues.
Overseas purchases of Chinese stocks and Treasuries has risen at the fastest rate ever compared with the same period in previous years, fuelled by its comparatively fast recovery from the pandemic.
Foreign investors have bought a net $35.3bn of Chinese stocks in the year to date – up 49 per cent compared with a year earlier, according to calculations by the Financial Times.
They’ve snapped up these Chinese holdings using trading platforms that link Hong Kong with exchanges in Shanghai and Shenzen.
Offshore investors have also acquired more than $75bn in Chinese Treasuries in the year to date – a 50 per cent rise from the year before, according to Crédit Agricole data.
The surging investments also come against a hostile backdrop of Beijing’s plans to tighten restrictions on overseas listings of Chinese companies – a move that could cost Wall Street $2tn worth of shares.
Last week, the Chinese government got the ball rolling with a data security crackdown on ride-hailing app Didi Chuxing, a matter of days after its $4.4bn float in New York.
As part of the clampdown, Chinese firms with data on more than 1m users will face security checks before they can list on foreign stock exchanges, the country’s digital regulator (CAC) said at the weekend.
Xi Jinping’s government is concerned about listings in the US, where over 30 Chinese firms raised a record $12.4bn in the first half of this year, according to data from Dealogic.
The security review, according to the CAC, will consider national security risks as “risk of supply chain interruption due to political, diplomatic, trade and other factors,” and risk of key data “maliciously used by foreign governments after listing in foreign countries.”