The size and speed of the sanctions imposed against Russia has forced a rethinking of the West’s attitude towards China.
World funds and large companies began to actively reduce investments in China due to fears of government intervention in business and the risk of possible sanctions after Russia’s invasion of Ukraine. Bloomberg reported this on Monday, April 18th.
It indicates that private equity funds investing in China raised just $ 1.4 billion in the first quarter, the lowest since 2018 in the same period.
In March, global funds began leaving China and selling more than $ 7 billion worth of stock in Hong Kong, as well as $ 14 billion of Chinese government debt over the past two months, and reduced their leverage.
British investment firm Artemis Investment Management explained that the size and speed of the sanctions imposed against Russia had forced it to reconsider the West’s attitude towards China. Beijing’s interference in the business, as happened with Didi and Ant Group, has also been affected, threatening shareholders ’rights. The intensification of Chinese rhetoric in Hong Kong is also a source of concern.
Russia’s example shows that strong trade relations are not a guarantee of diplomatic security, according to the investment company, and the Russian war against Ukraine dramatically increases these risks.
“Markets are worried about China’s relationship with Russia-it’s scary for investors and you can see that risk aversion has been there since the aggression began,” said Stephen Innes, managing partner at SPI Asset Management. “Everyone sells Chinese bonds, so we’re glad it wasn’t bought.” “.
At the same time, leaving China may not be an easy option. The world’s second largest economy owns a $ 21 trillion bond market and $ 16.4 trillion stock exchange (including Hong Kong).
Recall, the head of the US State Department, Anthony Blinken, said that China needs to make a choice in the confrontation between Russia and Ukraine, because it affects its reputation in the world.
Chinese companies pay for coal and oil from Russia in yuan – media
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Source: korrespondent
