Scalded by Russia, investment funds tread carefully in China

China, the only big economy promising a growth rebound this year, is again luring foreign investors. Yet the fear that Beijing may someday end up as ostracised from global markets as Russia is keeping a lid on demand.

The scale and coordination of Western sanctions on Russia triggered by President Vladimir Putin’s Feb. 24 invasion of Ukraine stunned financial markets and left managers sitting on billions of dollars of assets suddenly made worthless overnight, Reuters reports.

While such a move against China seems far-fetched given its economic size and the vast amount of foreign money invested there, it’s a risk many are reluctant to ignore.

“The global investment community is on notice that if another geopolitical event were to occur, the precedent is already set for these very restrictive and punitive sanctions,” said Bill Campbell, a portfolio manager at DoubleLine Capital, which manages $122 billion in assets.

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