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China remains attractive for foreign investors: State media

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Goldman Sachs had recently downrated the Chinese sovereign bonds to the neutral status from bullish.

In an op-ed, the Chinese state-owned news publication Securities Times said that the Chinese assets remain an attractive prospect for global investors due to the government’s pro-growth, market leaning policies, and strong economic fundamentals.

Another article said that the short-term outflows of capital by foreign institutional investors are not a reflection of the long-term prospects of the Chinese economy. This article also mentioned how 10 wealth management majors have also given a thumbs up to the Chinese economy. These reports come after the Chinese markets witnessed panic selling over fears of economic disengagement between the US and China in the backdrop of the Ukraine-Russia war.

An extent of the outflow can be gauged by the data compiled by Bloomberg. The compilation said that a net total of 35 billion yuan equalling $5.5 Billion of Chinese bonds were sold by foreign institutional investors in February. Following this, Wall Street-based Goldman Sachs investment bank had downrated the Chinese sovereign bonds to neutral from bullish status.

The turmoil was partially calmed after Chinese vice-premier Liu He promised that the government will continue with market-friendly policies mid-week. The CSI300 index of China’s major companies, which had fallen by 14% in the first two weeks of March recovered by 7% following He’s speech.

In recent years, foreign institutional investors have been increasing their asset allocation to China, reflecting their confidence in China’s economic fundamentals, Securities Times further said. It added that further liberal economic reforms will ensure the growth path of the Chinese economy further shortly.

China Securities Journal, another national state affiliate media, said that the open market stance of the Chinese government is reflected in the decision by Chinese companies going for listing in Switzerland.

Meanwhile, US President Joe Biden has warned Chinese President Xi Jinping that the latter will be met with consequences if it is found to aid Russia militarily or by giving them material support.

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