October 11th news, according to data from EPFR Global cited by Bank of America, in the week ending October 10th, global emerging market bond funds attracted $1.2 billion in inflows, maintaining positive inflows for four consecutive weeks. Chinese stock funds saw a record weekly inflow of $39.1 billion, while Indian stock funds experienced an outflow of $200 million for the first time since June 22nd. Additionally, emerging market equity funds have continued to see net inflows for the past 19 weeks. So far this year, the total outflow from emerging market fixed income funds has been $8.8 billion.

1. Policy incentives drive:

- Macro policy support: The Chinese government has recently introduced a series of policies to support the stock market, such as reducing the reserve requirement ratio and policy interest rates, providing long-term liquidity to the market, and lowering the interest rates on existing mortgages. These policies have not only improved the financing environment for businesses but also strengthened investors' confidence in the stock market, attracting a large amount of capital into Chinese stock funds.

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- Capital market reform: The reform of the capital market continues to advance, with the implementation of the registration system, which has increased the efficiency and transparency of the market, further enhancing the investment value of the Chinese stock market and attracting the attention of domestic and international investors.

2. Economic data improvement: China's economic data show signs of marginal improvement, such as the rebound in the manufacturing PMI. The gradual recovery of the economy provides support for corporate earnings growth, making investors more optimistic about the future of the Chinese stock market, thereby attracting capital inflows.

3. Valuation appeal: After a period of adjustment, the valuation of the A-share market is at a historical low, offering good investment value. For long-term investors, investing in Chinese stock funds at this time is expected to yield higher returns in the future, thus attracting a large amount of capital to enter the market.

4. External environmental factors:

- Federal Reserve rate cuts: The Federal Reserve's rate cut policy has increased the liquidity of global funds, making them more inclined to flow into emerging markets when looking for investment opportunities. As an important emerging market country, China's stock market has been favored by international capital.• RMB Exchange Rate Stability: The relative stability of the RMB exchange rate has provided favorable conditions for foreign capital inflow into China's stock market, reducing the exchange rate risk for foreign investment.