Goldman Sachs Chairman and CEO David Solomon stated that it is currently very difficult to withdraw funds from China, and global investors are reluctant to invest in China.
On November 19, he made the remarks at the annual “International Financial Leaders Investment Summit” of the Hong Kong Monetary Authority (HKMA). Attendees included Marc Rowan, CEO of Apollo Global Management, Jonathan Gray, President of Blackstone, as well as executives from acquisition groups such as KKR, TPG, CVC, and Carlyle.
Solomon mentioned that a major concern for global investors has been how to smoothly withdraw investments from China. “They have poured in a significant amount of capital, but over the past 5 years, it has been very difficult to withdraw funds (from China),” he said. “I believe that attracting capital and ensuring smooth capital flows are crucial for global investors.”
Solomon pointed out that there are currently a series of issues in China causing global investors to adopt a wait-and-see attitude towards investing in the country.
He added that investors are hopeful to see improvements in Chinese consumption and progress in the opening up of the capital market.
Morgan Stanley CEO Ted Pick also spoke at the same conference, agreeing with Solomon’s views and adding, “Transparency is crucial, and tackling currency tightening takes time.”
Regarding Solomon’s statement that withdrawing funds from China is very difficult, Jeffrey Perlman, CEO of Warburg Pincus, made a similar statement at the AVCJ Private Equity & Venture Forum held in Hong Kong. He stated that after the company exited an investment last year, it was challenging to withdraw $1 billion from China. “This is extremely challenging,” he remarked.
Due to China’s economic policies not meeting expectations and the anticipation of U.S. President Trump imposing tariffs on China, foreign funds have been flowing out of the Chinese stock market for five consecutive weeks.
According to Bloomberg, the FTSE China 25 Index ETF (FXI) saw a record high of $984 million in outflows last week. The KraneShares CSI China Internet ETF (KWEB), which tracks the broader Chinese internet market, recorded outflows of $710 million during the same period.
Chinese netizens expressed that not only are regular citizens restricted by official limits when withdrawing cash or transferring money from banks, even major financial institutions like Goldman Sachs are facing challenges in withdrawing funds from China.
“Even the big shots in Wall Street’s financial industry are now on a path of safeguarding their rights in China – only able to enter but not exit,” one netizen sarcastically commented.