Global funds are likely to return to Chinese assets in 2023 after a withdrawal this year, according to Morgan Stanley which also cut its forecast for inflows through 2030.
Inflows may be capped by a structurally higher risk premia next year following outflows of more than $100 billion in 2022, strategists and economists including Robin Xing and James K Lord wrote in a note. The firm now expects China to attract $120 billion to $200 billion of foreign portfolio inflows annually from 2023 to 2030, versus an earlier forecast of $200 billion to $300 billion.
