Business Insider: "China is failing to stop the exodus of investors from its stock market"

January was the sixth consecutive month that foreign investors sold shares listed in China, according to a Bloomberg report, writes Business Insider. Last month, global funds sold 14.5 billion yuan -- about $2 billion -- of Chinese stocks as authorities in Beijing have yet to find a solution to stem the outflows, the publication noted.

According to Business Insider, the market value of Chinese stocks has fallen by about six trillion dollars from the peak reached in 2021. The world's second largest economy has not fully recovered from the shock caused by the Covid-19 pandemic, is facing serious problems in the real estate sector, deflation and demographic challenges, including an aging population and unemployment located at historic levels among young people.

"There is a very pessimistic narrative about China that is proving very difficult to dislodge," said Nicholas Spiro, partner at Lauressa Advisory. "The country is clearly not in the good graces of global investors."

On January 22, Bloomberg announced that the Chinese authorities are considering a rescue package for the stock market worth up to 278 billion dollars, money coming mainly from the offshore accounts of state-owned companies.

However, experts consulted by Business Insider believe that there is little chance that investors will return to China. The bleak outlook stems mainly from the real estate market, which accounts for most of the country's household wealth. Thus, with real estate values depreciating, people's willingness to spend has deteriorated, as has sentiment about the economy and markets. According to experts, massive structural problems in the real estate sector make it difficult to find and implement solutions to restore investor confidence in China.