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- Big investors are going to reduce their exposure to Chinese assets, new data show.
- About 12% are planning to cut back on their China exposure, which is three times as many as in 2019.
- The reduction comes as China is cracking down on the tech sector and cryptocurrencies.
- See more stories on Insider's business page.
Big investors are planning to cut back on their exposure to China amid regulatory fears, new Invesco data show.
Over the summer, Invesco polled more than 200 professional investors, such as pension funds and insurers, and discovered that 12% of them planned to reduce Chinese assets in their portfolios. That's triple the number from Invesco's last such survey in 2019.
On top of that, 64% of big investors now plan to up their China exposure, compared to 80% in 2019. The Financial Times first reported the contrast.
China has been cracking down on the tech sector and cryptocurrencies this year, and has signaled it will create new laws for other key industries as well. Between the regulatory crackdown and the Evergrande crisis, investors have been weighing whether the country is a safe bet, renowned economist Mohamed El-Erian said on CNBC earlier this week.
Prominent investors have been vocal about cutting back on Chinese assets. Ark Invest's Cathie Wood said the firm has "dramatically" offloaded Chinese stocks because of Beijing's crackdown on big business. And legendary investor George Soros called BlackRock's push into China a "tragic mistake."
Meanwhile, Invesco has been ramping up its presence in China's mutual fund industry and now has $83 billion in assets under management, up from $19 billion in 2016, the FT reported.
Despite the latest survey results, the $1.61 trillion fund manager remains upbeat about China.
"China is continuing to open up and become friendlier to global investors; access has become more convenient; and the attractiveness of the [domestic] assets has increased in the last few years as a result of the government's effort to grow the economy and its capital markets," Andrew Lo, Invesco's head of Asia Pacific, told the FT.
source https://markets.businessinsider.com/news/stocks/chinese-assets-will-shrink-from-portfolios-amid-regulatory-concerns-2021-9