By Alice Uribe
SYDNEY–The big winners from rising skittishness over the investment environment in China appear to be emerging markets such as India, the chief market strategist at financial advisory and asset-management firm Lazard said.
Foreign direct investment in China shrank for the first time in 25 years during the latest quarter as Beijing and Washington sparred over technology deemed sensitive to national security and critical minerals used in electric vehicles. Tensions have intensified further since then, illustrated by U.S. officials tightening rules around the sale of artificial intelligence-enabling chips to China.
Ron Temple, Lazard’s chief market strategist, said money flows appear to have shifted toward emerging markets such as India, Vietnam and Mexico rather than diverting back to developed countries, and this is creating opportunities for investors. It also represents a bet on the interest-rate cycle, with emerging markets potentially outpacing the Federal Reserve when lowering borrowing costs.
“My view, based on the data we’ve analyzed, is that the money coming out of China is not going back to the U.S. or Europe or Australia,”…
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