PBOC’s poker face keeps nervous markets guessing

China's regulators are struggling to attract global funds to invest in the country's stocks due to a lack of strong stimulus measures to support growth, resulting in a slump in the MSCI China Index and significant outflows from the mainland market.

Global investors are skeptical of China's ability to stabilize its financial markets, with many predicting that economic pressures will cause the offshore exchange rate of the yuan to reach record lows.

Investors are becoming increasingly concerned about the state of China's economy as informal gauges, such as PMI surveys and soft surveys, indicate a deep-seated confidence problem and a potential miss of the country's 5% growth target this year, leading to a retreat from global assets exposed to the slowdown.

China's economic slowdown is causing alarm worldwide, with countries experiencing a slump in trade, falling commodity prices, and a decrease in Chinese demand for goods and services, while global investors are pulling billions of dollars from China's stock markets and cutting their targets for Chinese equities.

US companies are becoming increasingly hesitant to invest in China due to concerns over new anti-spying laws, competition from state-funded firms, and the country's economic challenges such as deflation and a property crisis.

Investors are avoiding global stocks with significant exposure to the Chinese market due to concerns over China's property slump and its impact on the economy, causing the MSCI World Index to recover to just 2% below its July-end figure.

A retreat of funds from Chinese stocks and bonds is diminishing China's global market influence and accelerating its decoupling from the rest of the world, due to economic concerns, tensions with the West, and a property market crisis.