(Bloomberg) -- Chinese stock funds saw the largest weekly outflow since October, as the government seeks to stem a decline in the stock market, according to Bank of America Corp. strategists.

About $1.6 billion was pulled from Chinese funds in the week through Feb. 28, a team led by Michael Hartnett wrote in a note, citing EPFR Global data. Emerging market funds overall had their first redemptions since November at $1 billion.

Beijing is attempting to restore confidence in its market after years of decline and slowing growth following the pandemic. As the turmoil deepened in recent months, the authorities have stepped up measures to help bolster sentiment, including restricting short selling and cracking down on high-speed trading.

Meanwhile, the macroeconomic picture is still mixed. China is still grappling with several key issues, including an unfolding property crisis and stubborn deflation. Its factory activity shrank for the fifth straight month in February, suggesting weak demand remains an obstacle.

To be sure, the outflows come after investors poured large sums into China funds with the world’s second-largest stock market showing signs of bottoming out after years of declines. The CSI 300 is now positive in 2024 after a strong rally this past month. Overseas investors snapped up a net 60.7 billion yuan ($8.4 billion) of onshore equities in February via links between Hong Kong and mainland stock exchanges. 

Read More: Cash Attracts Bulk of Inflow, Crypto Flows at Record, BofA Says

The focus will shift to the annual gathering of the National People’s Congress on Tuesday, where the ruling Communist Party makes economic and policy announcements. Areas of investor focus will include fiscal stimulus, efforts to bolster the real estate sector or consumer demand, and regulatory treatment of companies or sectors.

©2024 Bloomberg L.P.