The threat of China invading Taiwan, long considered a highly improbable event, has moved to the center of global money managers' risk radars and is factoring in their investment decisions, analysts say.
Fund managers say they are fielding more queries from clients about the odds of an invasion of Taiwan by China. Although none of them has made specific trades related to that risk, their overall exposure to China has reduced for other geopolitical reasons, and Taiwan figures heavily in asset allocation plans.
Taiwan has long been a flash point in U.S.-China relations, which have in recent weeks been put under further strain after a suspected Chinese spy balloon was shot down and the United States expanded a program in which its troops help train Taiwanese forces.