Foreign investors increased selling of Chinese shares in May due to weak domestic demand and anticipated poor corporate earnings. Refinitiv data reveals that they sold $1.71 billion worth of mainland shares via Stock Connect this month, following a $659 million sell-off in April. This signifies a reversal from their significant January investment of $20.92 billion when China reopened its economy after COVID-19 restrictions. Hopes for growth were dashed as both domestic and overseas demand weakened, with uneven recovery observed. China’s industrial firms also experienced a slump in profits during the first four months of the year, according to the National Bureau of Statistics.
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