Despite all disturbances, China is still attracting investors from all over the world. Even amid trading wars, the pandemic outbreak, and foreign and local conflicts, China remains one of the world's largest recipients of foreign investments.
Investors continue pouring money despite a significant economic slump and a threat of the financial market collapse. Thus, investments in Chinese funds hit the highest level since 2015.
Then, such flows of cash could be explained by rapid economic growth and an absence of numerous threats. “This week's $6.1 billion directed into China funds was the second-largest ever,” BofA said, citing data from EPFR global.
The surge was triggered by positive forecasts for the Chinese economy. As a rule, a slump is followed by a jump. That is why most market participants have decided that it is time to invest money.
However, analysts suppose that such a flow of funds may lead to a bubble. The same event took place in 2015-2016. After a sharp and groundless rise in the Shanghai stock exchange, all stocks nosedived by 40% just in several weeks.
