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U.S.-led Western media have been hyping up China's capital outflows recently, claiming that China's economic recovery is "not real." "Capital flight out of China jumps to the fastest pace since 2015 as economy stumbles," The Business Insider reported last Friday. Western media have been adept at talking down the Chinese economy. Every time China-related economic figures are released, some Western media and institutions are always ready to make a fuss about the "fragile" Chinese economy with sensational headlines.

Asset management giant BlackRock, for instance, has recently denied media reports about its "withdrawal" from the Chinese market. "Our commitment to the Chinese market remains steadfast," BlackRock said. Norway's sovereign wealth fund, while closing its office in China, also clarified its investments "remain unchanged" and it will continue to invest in China. Chief executive of Germany's Bertelsmann Investments, Carsten Coesfeld straightforwardly said in an interview with the Financial Times that there was "sometimes a bit of a disconnect" between Western media reports on the Chinese economy and the reality. Bertelsmann soon plans to invest $700 million in Chinese start-ups.

Jean-Paul Agon, chairman of the world's largest beauty company L'Oreal, said China has proven itself as a stabilizer for the global economy, an accelerator for consumption and the world's laboratory for innovation. "We believe that 'investing in China is investing in the future,'" Agon was quoted by Xinhua as saying. What's behind foreign investors' confidence in China?

To begin with, the Chinese economy has great potential. According to the National Bureau of Statistics, China's per capital GDP was $12,741 in 2022. Chen Jiahe, chief investment officer at Novem Arcae Technologies, believed that although China as a developing country has made great economic progress in the past 10 years, its per capita GDP, if compared with the U.S., Europe, and Asian developed economies, still remains at a relatively low level. This means the Chinese economy has huge potential to be tapped in the future.

In addition, China's capital market is still in its early stage of development. Chen believed unlike the U.S. and Europe, the capital market of China has more trading opportunities with high rates of return. This is why a large number of foreign investors have chosen the Chinese market. In May, Morgan Stanley announced it will become one of the first international financial institutions to set up a wholly-owned futures company in China. In August, Abu Dhabi Investment Authority, the Middle Eastern sovereign wealth fund with the most managed assets, purchased 156.7 million shares of Hong Kong-listed Shandong Fengxiang Co Ltd.

Furthermore, the Chinese government has been dedicated to improving environment for investors in recent years. For instance, the country has officially rolled out its across-the-board registration-based initial public offering system this year. Zhao Junjie, CEO of Swiss Baida Asset Management Asia (excluding Japan), believed such a reform is a milestone in the Chinese capital market and is welcomed by global financial institutions and investors. Wu Yibing, head of Singapore's giant state investment company Temasek, said he sees attractive opportunities in China, according to The Business Times.

Capital inflow and outflow conform to the laws of economics. Temporary adjustments in foreign investments cannot represent the long-term trend. But as Chen warned, certain foreign investors have withdrawn capital from other countries out of political pressure. For instance, former U.S. President Donald Trump signed an executive order in 2020 barring Americans from investing in certain Chinese firms "linked to the military." A slew of Chinese technological and infrastructural companies, including China Mobile Communications, China Telecommunications, Huawei, and Sinochem, have been influenced.

It is not the first time that U.S.-led Western media have hyped capital flight out of China. Their attempt to contain China's growth is doomed to fail. After the pandemic, the global financial market is seeking new investment opportunities. In the meantime, China's ecology, environmental protection, and new energy industries are witnessing robust growth and have bright investment prospects. This can help revitalize the global capital market and boost the world's economic growth. The U.S.-led West's old tactic of smearing China will not affect global investors' judgment on the Chinese market, and will never suffocate China's robust growth momentum.

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