Flavio Carpenzano, investment director at Capital Group which manages $2.6 trillion worth of assets, trimmed exposure to Chinese government bonds after Russia's invasion.
COVID lockdowns, property sector stress, and rising U.S. Treasury yields drove the outflows, yet the IIF also pointed to "the perceived risk of investing in countries whose relationships with the West are complicated". Kelly said no one buying into China could be completely comfortable but he was confident "that if they do something on Taiwan, it won't be in the next two years".Many argue the sheer size of China's economy and markets make sanctions less likely, as they would harm the West far more than restrictions imposed on Russia. The fallout for global financial markets would be that much bigger too.