China's stock market is once again in the spotlight of global investors, as Chinese stocks have fallen to their lowest level since before the Covid-19 pandemic. This situation is the result of a number of factors, including slowing GDP growth, a liquidity crisis in the real estate sector, and geopolitical tensions.

According to information published by the Financial Times, the CSI 300 index, which includes the largest Chinese companies listed on the Shanghai and Shenzhen stock exchanges, fell by 1.3% to 3463 points on Monday. This is the lowest level since 2019, and in dollar terms, the index has lost about 15% of its value this year.

Initially, Chinese stocks were a big draw for investors during the initial phase of the pandemic, as well as earlier this year, when they hoped for a rebound after the introduction of an aggressive zero-coverage policy.

However, the subsequent halt in economic growth, a series of defaults by Chinese developers, and geopolitical instability caused a sell-off in stocks. Even the measures taken by Chinese regulators since July to "revitalize capital markets and land policies to boost investor confidence" failed to stop the decline.

It is also worth noting that global funds are concerned about the deterioration of relations between the United States and China. Washington has increased pressure on asset managers over their investments in some Chinese companies listed in Shanghai and Shenzhen.

Now, for foreign investors who use the Hong Kong Stock Connect program to trade shares of Chinese mainland companies, selling has become an attractive alternative. Since the beginning of August, the volume of shares sold has amounted to 169 billion yuan (approximately $23 billion), which has led to a decrease in net inflows of more than 70% with a value of 66 billion yuan for the year.

For foreign investors, several factors, including geopolitics and China's economic condition, were decisive in driving them back to the Chinese stock market and increasing share prices.

China's stock market is going through a difficult period due to a number of factors, including slowing economic growth, problems in the real estate sector, and geopolitical tensions. This has led to a decline in the value of Chinese stocks, with the CSI 300 index falling to levels not seen in recent years. International investors are pulling out of their investments due to the turbulent environment and geopolitical problems between the US and China. Returning to the Chinese stock market requires solving the geopolitical and economic problems that are currently affecting the market.