Private capital fundraising focused on China plunged to a new low of $3.4 billion in the second quarter as foreign investors turn their backs on the world’s second largest economy, according to a new report by data provider Prequin.
That amount was less than a tenth of the average quarterly tally of about $45 billion in the years from 2019 to 2021 and shows the impact of geopolitical tensions, weak local markets and liquidity constraints, a lead author of Prequin’s Asia-Pacific (APAC) report published on Wednesday, according to a report by the South China Morning Post, which quoted Angela Lai as saying China-focused funds were “still having a very challenging time.”
Total private capital raised for China dropped consecutively for four quarters after a slight rise to $10 billion in the second quarter of 2023, Prequin said.
Foreign direct investment in China fell 27.9% year-on-year to just over 360 billion yuan ($49.7 billion) from January to April, according to official data, the SCMP said, noting that weak domestic demand and an economic slowdown were among the factors convincing foreign investors to look elsewhere.
Read the full report: The SCMP.
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