Pressure from Chinese regulators accelerates the flow of funds to developing countries

While going through a difficult turn within the scope of the new type of coronavirus (Kovid-19) epidemic, the Chinese authorities, which are advancing in line with the economic growth model and the goal of transformation in the financial markets, have implemented regulatory mechanisms for many sectors since the beginning of the year, bringing along fund outflows from the country. In the process that started with the adoption of the Hong Kong National Security Law by China's top legislative body, the National People's Congress (NHK), the escalation of tensions between the USA and China was considered the starting sign of the exit from the Chinese stock markets. The transfer of regulations regarding Chinese game and technology companies traded on the Kong stock exchange to other sectors brought to the agenda rumors that wealth funds started to leave the country heavily.

In these rumors, some countries, especially the USA, warned companies about the risks to their operations and activities in Hong Kong. On the other hand, after the Chinese market regulators suspended nearly 50 public offerings in the country's two major stock exchanges, Shanghai and Shenzhen, in August. The message that the controls on entry to the capital market will be tightened and that there will be zero tolerance for market abuse stood out as a development that intimidated the investors. Emphasizing that the increase in the pressures of the Chinese regulators was effective in this increase in the exchange-traded funds to developing countries other than China, analysts point out that as a result of these pressures, the Hang Seng index in Hong Kong has decreased by up to 16 percent since the beginning of June. refused.

Stating that about half of the money in the markets is led by exchange-traded funds (ETF), Mobius said, "30 percent of the emerging market index is China. At the moment, money is flowing to everywhere other than China. Therefore, in the future, money is in Turkey, India and other emerging markets. We will see it flow into countries with Mobius emphasized that the stock markets should be enlarged and the way for more public offerings should be paved in order to make the funds coming out of China attractive to alternative and potential countries such as Turkey. It's getting more and more attention." said.