Portfolio investment flow to China is a weathervane for China's financial health and global investor confidence.Chart 1 shows the capital flows via the Stock and Bond Connects in February-June.We studied the force...Portfolio investment flow to China is a weathervane for China's financial health and global investor confidence.Chart 1 shows the capital flows via the Stock and Bond Connects in February-June.We studied the forces that drive China's net bond and equity flows.It shows that relative economic growth,bond yields,RMB exchange rate,market volatility,and index inclusion explain about 50%of the flows(Chart 2).Many other factors,such as policy and geopolitical risk,which are hard to quantify,are also behind the ebb and flow of portfolio investments.展开更多
文摘Portfolio investment flow to China is a weathervane for China's financial health and global investor confidence.Chart 1 shows the capital flows via the Stock and Bond Connects in February-June.We studied the forces that drive China's net bond and equity flows.It shows that relative economic growth,bond yields,RMB exchange rate,market volatility,and index inclusion explain about 50%of the flows(Chart 2).Many other factors,such as policy and geopolitical risk,which are hard to quantify,are also behind the ebb and flow of portfolio investments.
