More than two years of growth-squelching policies sent international investors fleeing China. It’s taken all of two weeks to lure them back.
From Morgan Stanley and Bank of America to TCW, Fidelity International and Franklin Templeton, some of the biggest players in global markets are turning increasingly bullish on Chinese assets. It’s a stark contrast from just last month, when foreign firms pulled an estimated $8.8 billion from the nation’s slumping stocks and bonds, and analysts were predicting more gloom ahead.
The dramatic about-face comes as Beijing seemingly shifts toward a more pro-growth footing, tweaking COVID-19 policies to minimize economic and social costs, delivering a plan to rescue the beleaguered property market and dialing back tensions with the West. The result: mainland shares are up more than 8% in November, while the yuan is on pace for its first advance in nine months. With concerns that monetary-policy tightening in the U.S. and Europe could soon tip the developed world into a recession, foreign firms are increasingly looking to China as a key portfolio hedge.