HONGKONG: Investors are ditching China at an unprecedented scale as a cocktail of political and business risks, and rising interest rates elsewhere, make the world's second biggest economy a less attractive place to keep their money, the media reported.
China witnessed $17.5 billion worth of portfolio outflows last month, an all-time high, according to most recent data from the Institute of International Finance (IIF), CNN reported.
The US-based trade association called this capital flight by overseas investors "unprecedented", especially as there were no similar outflows from other emerging markets during this period.
The outflows included $11.2 billion in bonds, while the rest were equities.
Data from the Chinese government also showed a record bond-market retreat by foreign investors in recent months. Overseas investors offloaded a net 35 billion yuan ($5.5 billion) of Chinese government bonds in February, the largest monthly reduction on record, according to China Central Depository and Clearing.
The sell-off accelerated in March, hitting a new high of 52 billion yuan ($8.1 billion), CNN reported.
"China's support for the Russian invasion of Ukraine was clearly the catalyst for capital to leave China, " said George Magnus, an associate at the China Centre at Oxford University and former chief economist for UBS.
"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, " said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics, who has studied China's economy and US-China relations.