With the trade war between China and the United States as the main backdrop, many investors are worried that the global trade is going for the worse. Nevertheless, China recently announced that it is implementing new supportive measures in order to balance out the negative effects of the trade war. These measures were positively received by the market as China's major indexes recovered as the market closed on Tuesday.
China has acknowledged the fact that the trade war against the United States has its own set of repercussions not only to the country itself but also to the neighboring states that rely on it for trade. Lately, market anxieties grew as trade tensions between two of the world's largest economies continue to threaten the global trade scale.
In order to calm down investors, China recently announced that it is implementing a new set of supportive measures in order to somehow mitigate, if now completely eradicate, the negative effects of the trade war. As a result, China's main indexes reported that they were able to recover the losses brought upon by the trade war.
Based on the latest figures released by Bloomberg, foreign investors have racked up a total of 52 billion yuan worth of A shares through trading connections in Shenzhen and Shanghai. What is even more impressive about this figure is that all of it was transacted this January alone. Many observers have noted that China opened the year with quite a bang and that the trend will continue well within the next couple of months.
In a statement with Bloomberg, Fuh-Hwa Securities Investment Trust fund manager Vincent Hsu said, "Funds are flowing back to emerging markets after the U.S. slowed the pace of rate hikes." Mr. Hsu added that this recent uptick in Chinese stock prices means that China's government stimulus package is working.
In 2018, more than $2 trillion worth of stocks were withdrawn from China's stock markets. This caused quite a drop in terms of market valuation. However, as numbers for the month of January continue to pour in, many market analysts believe that China should be able to easily staunch all those losses within the foreseeable future.
Interest towards Chinese equities has been noticeable high recently. This month, the Shanghai index went up by 3.3 percent, while the Shenzhen index improved by 1.3 percent.
