IIF reports $3.5B outflow from China equities in August as foreign investors stay cautious

Foreign investors pulled roughly $3.5 billion out of Chinese equities in August 2026, according to the Institute of International Finance’s latest capital flows data. The number is nearly identical to the $3.7 billion that fled in July, painting a picture of sustained, deliberate retreat from the world’s second-largest economy’s stock markets. Meanwhile, the rest of the emerging market universe is doing just fine. Total nonresident EM portfolio flows clocked in at $11.3 billion in net inflows for August, down from $24.9 billion in July but still comfortably positive. The numbers tell a consistent story The August data from IIF breaks down into a familiar pattern. China equities hemorrhaged $3.5 billion while Chinese debt instruments managed a meager $0.2 billion inflow. July told a similar tale, only worse on the debt side. Chinese equities lost $3.7 billion that month, and debt instruments saw $3.4 billion walk out the door. The broader EM context makes China’s isolation more striking. Overall EM equities experienced $7.8 billion in outflows during July, meaning China alone accounted for nearly half of the damage. Debt markets were the saving grace for the asset class, with $26.7 ...