In the latest quarterly report, Zero2IPO Research Center shows that foreign investment into China slumped 60% in the first quarter of this year. Besides, the Institute of International Finance presented in an earlier report that the world’s second-largest economy suffered significant capital outflows in March.
Zero2IPO reported that 20 foreign currency funds raised around 31.5 billion yuan (4.8 billion dollars) in the first quarter of 2022. This figure indicates the plunge of over 60% in foreign investment into China.
Among these foreign currency funds, Gaorong Capital’s USD Fund phase-6 raised 1.85 billion dollars; Tiger Global Private Equity Fund phase-15 raised 1.12 billion dollars; Blackstone Asia Acquisition Fund phase-2 raised 790 million dollars; Huaxing New Economy’s USD fund phase-4 raised 250 million dollars, and Weilai Capital’s USD fund phase-2 raised 226 million dollars.
In terms of equity investment market segments, venture capital (VC) and private equity (PE) are much more popular than early-state investment. However, they all experienced a downward trend in both amount of funds raised and the number of foreign funds.
The overall performance of Chinese firms listed overseas was at a historical low.
Particularly, only 12 Chinese companies went public on the Hong Kong stock exchange with a total capital of nearly 1.4 billion dollars. This IPOs number slumped by about 50% compared to the first quarter or fourth quarter of 2021. The amount of capital plummeted 90% in the same period of last year.
Only one Chinese company was listed on the Nasdaq stock exchange. That is Meihua International Medical Co., Ltd. According to Bloomberg, the medical device maker has attracted 36 million dollars in its U.S. trading debut.
The latest data by the U.S.-China Economic and Security Review Commission shows that 21 Chinese companies had listed their shares in the U.S., raising nearly 4.5 billion dollars.
Zero2IPO believes that the rare U.S. listing of Chinese companies this year is due to the American tightened scrutiny of China concept stocks listed in the U.S.
Fundraising distribution by region also indicates gloomy status, with the vast majority of areas recording a negative growth rate in terms of all three funding methods.
In terms of foreign outflows, Reuters reported statistics from the Institute of International Finance (IIF) that 11.2 billion dollars and 6.3 billion dollars were withdrawn in bonds and stocks, respectively. The IIF described this trend as an “unprecedented dynamic,” implying a market shift away from China. This is the first time since September 2020 that China assets have suffered such dramatic outflows in equities.