Hong Kong’s Hang Seng has rallied 50% in the three months to the end of January, but incoming foreign investment has moderated and broker analysis attributes much of the rally to hedge funds seeking quick gains.
For longer-term investors, the explosion of friction into outright conflict in Ukraine and President Xi Jinping’s consolidation of power in China have given pause for thought while Sino-U.S. competition also heats up.
Several say the perceived danger of conflict across the Taiwan Strait has risen. Others note that war in Ukraine has solidified diplomatic and trade alliances, with China and the West increasingly on opposing sides – all of which represent new risks in parking money in the world’s second-biggest economy.
“For the American investor, we have to consider whether we are enabling economic development of an adversarial government,” said Kevin Philip, partner at Bel Air Investment Advisors in Los Angeles, which manages $9.5 billion…
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