In the Market: Funds fret over the fallout of Biden's China order

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Fund managers are worried the Biden administration's move to restrict some outbound U.S. investment to China will further fuel anti-Beijing sentiment in Washington and prompt more limitations. The executive order regulates U.S. investments in China in sensitive technologies. Investors, advisers and an adm

Fund managers are worried the Biden administration's move to restrict some outbound U.S. investment to China will further fuel anti-Beijing sentiment in Washington and prompt more limitations.

For U.S. investors trying to navigate the geopolitics, the noise in Washington is making it hard to determine what they should be doing in China. The executive order along with anti-China moves by lawmakers and agencies means the overall policy is unclear and riddled with landmines. China is making it harder for businesses, too. The uncertainty is likely to hit investment flows further and add to the urgency of contingency planning.

This person, who requested anonymity because of the sensitivity of the situation, described the environment from business perspective as"a combination of confusion and fear," with policy debates expressed by"punching companies in the nose."Take the case last week of letters excoriating Blackrock and MSCI from the Select Committee on the Chinese Communist Party.

That's narrow enough for many fund managers to keep operating in China without any impact, top executives from two major firms with China business said. But if restrictions were to broaden it would be a different story.

 

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