China's stock market on the verge of collapse: Foreign investors could finally be deterred, warns financial expert.

China's stock market on the verge of collapse: Foreign investors could finally be deterred, warns financial expert.

According to a report by www.businessinsider.de, the decline of China's stock market has caused long-term damage to foreign investors. Chinese President Xi Jinping has his hands full trying to stop foreign investors from fleeing. Since the beginning of 2021, Chinese companies on domestic and US indices have suffered a combined loss of $7 trillion. Experts like Jeremy Mark of the Atlantic Council predict that the Chinese market will become more volatile and investors will be looking for quick profits.

The uncertainty in the market could mean that foreign investors do not return in the long term as they see no reason to get back in. This could make China a magnet for investors looking for quick profits rather than stable growth. Opportunities for foreign investors to invest in China could focus on hedge funds and bargain hunters, which could cause further volatility in Chinese markets.

The Chinese government's measures to stabilize the market have so far led to a recovery in the indices. In particular, Beijing responds to financial stress with state-sponsored purchases, restricted access to offshore markets and limits on short selling. However, a sustainable recovery depends on dealing with the broader crises, particularly the real estate market, as this accounts for a large part of the country's GDP. The reliance on high levels of debt in the real estate market has led to massive defaults in China, which has put real estate giants under pressure to liquidate.

Foreign investors' disappointment with the Beijing government's slow response, coupled with the crackdown on the tech sector, has led to investors pulling out of the Chinese market. This development has also impacted China's startup scene, as the IPO market dries up and new companies struggle to access capital. Overall, the outlook for foreign investors in China is uncertain as the government shows signs of becoming less tolerant of business as usual. Although the economy and real estate market may bottom out in 2024, uncertainty remains about the long-term impact on the market.

China's stock market facing a turning point

• Chinas Aktienmarkt erlebt einen Niedergang und könnte langfristig geschädigt sein.
• Ausländische Investoren haben seit Anfang 2021 sieben Billionen Dollar Verlust erlitten.
• Ausländische Investoren könnten aufgrund der unsicheren Wirtschaftslage das Land meiden.

China's real estate market as the biggest challenge

• Peking hat Maßnahmen ergriffen, um den finanziellen Stress zu mildern und die Markterholung anzukurbeln.
• Das Vertrauen der ausländischen Investoren wurde durch Pekings langsame Reaktion auf die finanzielle Krise erschüttert.
• Der Tech-Sektor stand 2020 bereits im Fokus staatlicher Eingriffe, was Investoren verunsicherte.
• Der chinesische Aktienmarkt verzeichnete im vergangenen Jahr nur geringe Zuflüsse von ausländischem Kapital.
• Dies hatte direkte Auswirkungen auf Chinas Startup-Szene, da der Markt für Börsengänge austrocknete.