Photo = Getty Image Bank Global investors are pulling big bucks out of exchange-traded funds (ETFs) that invest in Chinese companies. The outlook for the Chinese market has darkened due to US President Donald Trump‘s threat of a ‘tariff bomb’ on Chinese products and the unexpected announcement of China’s economic stimulus plan.
According to Bloomberg News on the 11th (local time), $315 million (about KRW 441.1 billion) was released from the Chinese ETF ‘iShares China Large Cap ETF (FXI)’ listed on the US stock market from 4th to 8th. The sales trend continued for four weeks. $280 million (about KRW 392.1 billion) was withdrawn from the iShares MSCI China ETF (MCHI) during the same period.
As the possibility of high tariffs being imposed on China increases following President Trump’s presidential victory, investors are wary of China’s economic outlook. During his campaign, President-elect Trump promised to impose a 60% tariff on Chinese products.
The economic stimulus package recently introduced by the Chinese government is also disappointing. On the 8th, Chinese authorities announced a plan to invest 10 trillion yuan (about 1,932 trillion won) over the next five years to solve local government debt problems, but no specific mention was made of when and the size of the expected spread. special government bonds and special local bonds. “Investors were disappointed by the lack of a comprehensive plan by Chinese authorities to respond to the second Trump administration,” said Roxanna Islam, head of industry research at ETF research firm BetaFi.
There are predictions that a comprehensive economic stimulus package will be introduced starting next year, but it is unclear whether investor confidence can be restored. Malcolm Dawson, senior portfolio manager at Global
On the 10th, UBS presented China’s gross domestic product (GDP) growth rate forecast for the next year at around 4% and announced, “We will also significantly reduce the growth rate forecast for 2026 .” Considering the impact of President-elect Trump’s tariff policy on the Chinese economy, the growth forecast for the next year was lowered by 0.5 percentage points in just one month. UBS expected the US government to gradually impose additional tariffs on Chinese products starting in the second half of next year.
After the US presidential election, China’s Shanghai Composite Index rose 3.38%. The CSI300 index, which includes 300 blue-chip stocks in the Shanghai and Shenzhen stock markets, showed strength, rising 3.57% in the same period. Expectations for the economic stimulus package to be announced at China’s National People’s Congress on the 8th boosted the index.
However, as the stimulus package failed to meet market expectations, both indexes fell more than 1% that day, paring their gains.
Reporter Lim Da-yeon allopen@hankyung.com
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2024-11-12 08:55:00
