Foxconn Flees China for India; Foreign Capital Withdrawals Hit $3.17 Billion in 5 Days

In April, rumors of Foxconn's exodus from China and its move to India sent stock prices in China and Hong Kong tumbling. Data indicate that during the five trading days starting April 23, over $3.17 billion in foreign capital fled China through the Shanghai-Hong Kong Stock Connect mechanism, amounting to more than 21 billion RMB. This marked the longest capital withdrawal streak since November last year.

On April 24, Foxconn officially announced its investment in India through the Hong Kong Stock Exchange, a move that will inevitably diminish its investment in China and impact millions of jobs in mainland China. Consequently, the Chinese and Hong Kong stock markets experienced notable fluctuations that day, with a broad market decline breaking expectations. Market panic led to a drop in both China and Hong Kong stock indices, with the Shanghai Composite Index falling below 3000 and the ChiNext Index hitting a new low. Trading volume in both markets surpassed one trillion for 15 consecutive days after falling for four straight days, with a net outflow of 4 billion in foreign capital.

Foxconn Interconnect Technology estimated on April 24 that net loss from continuing operations for the first quarter would range between $5 million and $10 million, compared to a net profit of $30.6 million for the same period last year. The loss is attributed to the group's investment in digital transformation, which involves moving from mainland China to India and incurring additional costs.