Nikkei Chinese Edition recently reported that money is flowing out of emerging market assets, especially Chinese equity funds. Chinese stock markets experienced outflows for five consecutive weeks. Outflows from the Chinese market during the last four weeks reached US$16.9 billion, an all-time high. Nikkei cited data from EPFR, an American research firm that tracks global investment trust funds.
The Conference of the Chinese National People’s Congress, which concluded on November 8, did not introduce further fiscal stimulus to the Chinese markets. According to Naoki Tsukioka, chief economist at Mizuho Research & Technology in Japan, “There is a growing view in Chinese markets that the situation is ‘worse than expected.'”
Equity funds in India, Brazil, and Thailand also saw major capital outflows. The backdrop to such outflows is the strength of the US economy. The appreciation of the US dollar relative to other currencies has led to the expansion of US dollar debt in emerging market countries. Capital flows in emerging markets may further change under policies expected from the coming Trump administration, with China and Mexico likely to be negatively affected.
Source: Nikkei Chinese, November 19, 2024
https://cn.nikkei.com/china/cfinancial/57284-2024-11-19-09-14-59.html