(Reuters] – Foreign investors have returned to China’s troubled stock and bond market in May after Beijing increased efforts to revive the economy. This was in response to months of COVID lockdowns, and heightened international political tensions.

Hard anti-virus controls remained in place, but foreign investors still bought $2.5 BILLION worth of China-listed shares. This was according to Refinitiv Eikon’s data.

According to the Institute of International Finance data, China witnessed a net inflow of $2.5 billion into the bond market in May. It would end a streak of three months without foreign outflows if confirmed by China’s data.

UBS Global Wealth Management chief investment officer Mark Haefele said China was one of his top markets due to recent relaxations in COVID-19 regulations, the government’s stimulus measures, and lower stock values.

Shanghai has ended its two-month-old lockdown due to the virus on June 1 and Beijing has lifted COVID-19 limitations. As policymakers shift back to growth in an effort to stabilize the economy, analysts warn it might take many months.

China’s blue-chip CSI 300 index saw an 8% rise in the month ahead of its policy shift, thanks to expectations.

The fears of Western sanctions on China due to Russia’s actions in Ukraine have subsided. These worries are a result of Beijing’s close friendship with Moscow. According to IIF, there was an “unprecedented amount” of capital outflows to China in the first quarter.

GRAPHIC: Foreign flows into Chinese stocks via Stock Connect (https://graphics.reuters.com/GLOBAL-MARKETS/jnvwezddnvw/chart.png)

Refinitiv data estimates that Chinese businesses’ earnings will grow by 12.42% in 2022, even with fallout from lockdowns. That is more than Asia’s 11.9% growth.

The forward 12 month price-to earnings ratio for Chinese companies is 9.62. This ratio is second in Asia, after South Korea. It has prompted some investors to consider bargain hunting.

Chinese shares saw cumulative foreign outflows totaling $465 millions in the five first months of 2012. This was lower than India’s 20.1 billion, Taiwan’s $24.8 million, and South Korea’s 11.3 billion.

Goldman Sachs (NYSE) stated that geopolitical tensions or COVID restrictions do not fundamentally alter the decision of whether to invest in the second largest equity market.

The Wall Street Bank said however that there was a growing demand from global investors to either diversify away or manage China-related risk.