× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

China's stance on Russia-Ukraine conflict cause capital flight

ASIA
By Agencies | Apr 27th 2022 | 2 min read
By Agencies | April 27th 2022
ASIA
China's national flag. [Courtesy]

 

The speculation of a possible Chinese invasion of Taiwan amid Beijing's support for Russia's military operation in Ukraine has triggered an unprecedented capital flight from China, various news outlets from Asia report.

This stems from the large offloading of Chinese government bonds by overseas investors in recent months.

The Hong Kong Post reported that China is facing a huge trust deficit from international investors as it witnessed a portfolio outflow worth nearly Sh1.8 trillion, last month.

Citing data from the Chinese government, CNN reported that the Asian country witnessed a record bond-market retreat by foreign investors in recent months with an offloading of Chinese bonds worth Sh6 trillion in February.

This comes as China's ambiguity concerning Ukraine-Russia is scaring away the investors.

Though the communist country refuses to criticize "friend" Russia's actions in Ukraine, Beijing has not done anything to help Moscow for the fear of attracting crippling sanctions from the West.

"There is nervousness about China's ambiguous, but Russia-leaning stance on the Ukraine conflict, which raises worries that China could be targeted by sanctions if it helps Russia," CNN quoted Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, as saying.

The American media outlet also cited "rate hike in the United States and China's strict COVID-related lockdowns" as a reason behind the capital flight.

China's rigid 'Zero-COVID' policy that led to the complete shutdown of scores of cities and towns, including Shanghai, its ports and airports, halting manufacturing and trade, has increased "uncertainties about future growth", said The Hong Kong Post.

According to analysts, the Chinese government's crackdown on private businesses late last year to instil fiscal discipline also had a cascading effect on the economy, affecting industry morale and making foreign investors more nervous as they don't want to play regulatory guessing games or worry that tomorrow's news may deplete another company or business model in China.

Amid such a situation, international organizations and investment banks have slashed their growth projections for China this year with the International Monetary Fund (IMF) reducing its prediction from 4.8 to 4.4 per cent. (ANI)

Share this story
Jumia Food inks delivery deal with Domino's in shift by pizza maker
Jumia Food has inked an exclusive partnership with Domino’s Pizza to help the firm reach more consumers and grow its business.
Brace for higher beer, spirits prices, warns EABL boss
The price of beer and spirits is set to go up if the National Treasury effects proposals to raise the excise tax on alcoholic products.
.
RECOMMENDED NEWS
Feedback