
Business Jul 18, 2022
China is pariah for global investors as Xi’s policies backfire
Money managers once enticed by China’s juicy yields and huge tech companies now say reasons to avoid the country outweigh incentives to buy.
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Money managers once enticed by China’s juicy yields and huge tech companies now say reasons to avoid the country outweigh incentives to buy.
The city's stock market has tumbled this year at one of the fastest rates globally, home prices are falling and signs of capital flight are multiplying.
Unlike in 2020, when Beijing was able to limit disruptions to its manufacturing hubs and rely on global liquidity to shore up investor confidence, this time it has to go at it alone.
A growing list of risks is turning China into a potential quagmire, with the central question being what could happen when the country goes to great lengths to achieve its leader’s goals.
The government in Beijing showed little regard for those same investors last year when it unleashed a series of crackdowns on the country’s most profitable companies.
Even though it’s unclear whether the beaten-down sector has reached a turning point, traders are having a hard time turning down bets that things will improve.
The timing is particularly tricky as China juggles an economic slowdown, a sweeping crackdown on the private sector and rising tensions with Washington.
Huarong ultimately proved too big to fail, but its protracted bailout process demonstrates Beijing’s determination to punish creditors who ignore risks in heavily indebted companies.
Over the past year, Xi Jinping’s government has sought to gain control of the vast amounts of data held by large tech firms.
China is resorting to increasingly forceful measures to contain risks to the financial system, in moves that could undermine Xi’s pledge to give markets greater freedom.