Global Investors Renew Interest in China Amid Economic Revival Efforts

Global investors are cautiously re-entering the Chinese market due to Beijing’s efforts to mitigate economic slowdown. While immediate growth is uncertain, government initiatives to attract investments and boost consumer spending have raised interest. Institutional investors observe a potential upside despite ongoing U.S.-China tensions and a struggling Chinese consumer confidence.

Global investors are cautiously re-entering the Chinese market as Beijing makes efforts to mitigate its economic slowdown. This shift in sentiment comes amid the Chinese government's initiatives to attract more investments into equities and stimulate consumer spending.

While immediate growth is not on the horizon, these policies have increased the appeal of currently low Chinese company valuations. Notably, managers of more than $1.5 trillion in client funds are paying attention, with some selectively buying Chinese stocks. "We're going to be very disciplined but in aggregate we feel there's more upside than downside," said Gabriel Sacks, an emerging market portfolio manager at Abrdn.

Despite a fifth consecutive month of declining factory activity and a sharply slowing services sector in September, investors reckon that the tide is turning. Promising to hit a 5% growth target, Beijing has eased home-buying restrictions, cut bank lending rates, and offered cheap funds to stock brokers. This has led to a significant boost in the Chinese stock market, although long-term investors remain cautious.

(With inputs from agencies.)