From 2003-2007, over US$100 billion poured into China via offshore structures in tax havens like the Cayman Islands. Much came from global institutional investors who tasked alternative investment managers with allocating a percentage of their portfolios to high-yield opportunity funds, emerging markets and real estate.
Everyone wanted a piece of the “China Dream,” but in recent months they have woken up to deteriorating economic conditions. Institutional investors are forcing redemptions of their investments from high-yield, high-risk markets.
Jack Rodman, Senior Advisor to King & Wood\‘s International Debt/Restructuring Practice
Summarized from Mr. Rodman’s article for China Economic Review, May 2009.