EQUITY INVESTORS RETURN TO U.S. FROM CHINA

Since November’s U.S. presidential election, $170 billion more has flowed into U.S. stock funds than has left, according to data firm EPFR.
In contrast, only a net $29.78 billion funds went into China’s stock funds from December 2020 through 17 April this year, EPFR reported.
When the world’s economy collapsed in March 2020, the U.S. economy and its equity markets puckered with it. At the time, China was controlling its COVID outbreak and already returning its factories to production to supply a needy world.
As the U.S. struggled to right itself, in part by imposing rock-bottom interest rates, investors found China and its stock markets a more lucrative place to put money.
Now president Joe Biden’s $1.9-trillion rescue package, $2.3-trillion infrastructure and jobs plan, and successful vaccine campaign have persuaded those investors that the U.S. is once again the place to be.
“China got the initial jump but the U.S. came roaring back,” Cameron Brandt, EPFR’s research director, told CNBC.
TREND FORECAST: We maintain our forecast that both long and short term, the Chinese economy will grow faster and be more resilient than America’s. Thus, the money going into U.S. markets will top out shortly before the bubble bursts.
China has announced a 6-percent GDP growth target this year, but it will most likely rise higher considering current trends. Thus, Beijing’s focus will be on stabilizing the nation’s economy, reducing reliance on growth through debt compared to the U.S. and Europe which have, and will continue to increase their debt burden.