Capital Economy, Business and Finance
Chinese regulators have stopped trying to prevent mutual fund managers selling more shares than they buy on a given day, Reuters reports. This could be a nothingburger; there’s been no official rule change. But it could also be a significant concession to reality as foreign investment in China falls and punters try to get their money out. Chinese FDI either sagged or slumped in the first three quarters of last year, depending on your preferred metric. The State Administration of Foreign Exchange recorded a 92 per cent decline compared with the same period in 2022. The official response was a ban on net selling of Chinese shares by funds on a day to day basis. As long as they bought more than they sold, the thinking went, outflows would be curbed. But that sort of ban is precisely the kind of thing that spooks already wary investors, which may be why it has quietly been lifted. China-watchers who no longer trust official GDP figures will be watching FDI numbers carefully this year.