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Foreign investors to blame for China stock rout, says hedge fund manager Li

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One of China’s top macro hedge fund bosses has blamed foreign investors for the recent rout in the country’s stock markets which has seen Chinese domestic stocks sink to their lowest levels since November, according to a report by Bloomberg.

The report cites Li Bei, the founder of Shanghai Banxia Investment Management Center as identifying “foreign funds” as the primary drivers of the recent sell-off in Chinese stocks. In an article posed on social media platform WeChat, she said that overseas investors had stirred up market volatility and, “taken together, they are a bunch of aimless flies”.

Li’s comments came after Hong Kong’s benchmark Hang Seng Index and the onshore CSI 300 both set new 2023 lows. While foreign investors had upped their buying of mainland Chinese stocks following the issue of a pro-growth policy statement by the Chinese government last month, as of Monday they had sold A-shares on a net basis via trading links for 11 straight sessions, the longest selling streak since Bloomberg began tracking the data in December 2016.

According to report by China International Capital Corp though, foreign funds have accounted for just around 6% of the total onshore turnover this year and overall, they own less than 4% of total A-shares outstanding.

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