Are Global Investors Pivoting to China Amid the Iran War?

With the world becoming increasingly multipolar, investors are reacting in kind by diversifying and avoiding concentrated exposure. China is viewed as potentially a major beneficiary of this trend, according to industry leaders at a Hong Kong event hosted by think tank Milken Institute. There are no obvious signs of imminent de-escalation in the military conflict in the Middle East, leading to various further questions, including the continued decline of the international rules-based order. According to industry leaders speaking at the 2026 Global Investors’ Symposium Hong Kong hosted by US-based think tank Milken Institute, investors are naturally considering how to re-allocate assets to better diversify risk, especially above and beyond day-to-day headlines. «We're not too worried for the short term. The bigger question is [the] medium and long-term impact on the global economy,» said Kevin Lu, chairman, Asia, Partners Group, citing concerns including energy prices and geopolitical fragmentation. «The other thing we pay a lot of attention to is we sort of watch where this smart money goes.» Diversifying Away from the US Some of this smart money is seeking diversification away from the US. Aaron Costello, head, Asia, at Cambridge Associates, said that non-US markets are set to benefit whenever the current crisis is over, as America has become «if not unreliable, certainly more erratic», leading other countries to have to focus on developments to become more self-reliant. One major trend Costello has observed is the return of investor interest in China, with a thaw from Europeans and a gradual warming up from Americans, particularly as he believes that it is clear that Washington wants to strike a deal with Beijing. «So I think the geopolitical risk premium investing in China actually has shrunk. And I think if China can deliver […] the earnings growth and returns, then the investors will come back,» he added. AI and Bio Theme Within China, there are two top themes for investors to consider, according to Hoi Tung, CEO and chairman of Ping An Overseas Holdings. First is artificial intelligence with evidence, such as the renowned «DeepSeek moment», of being able to compete with the US. Second is in biotech, where he believes China has an edge in areas like drug discovery and preclinical trials. «I think if you invest in China, obviously, I think these are two areas. I think it has a structural benefit given the government support, given the embedded competitive advantage, as well as the human resources and talent support that you can draw upon,» Tung remarked. «I think these are all very positive to me.» Beyond China Outside of China, panelists also spoke about other emerging markets. Christopher Ganis, chief investment officer of Indonesia Investment Authority – the Southeast Asian nation’s sovereign wealth fund – noted that more companies are onshoring or friend-shoring their supply chain to adapt to the fast-changing environment, resulting in new investment opportunities. We are operating in a different world, right, that the acceleration of a multipolar world is becoming more prevalent. I think the mantra of getting as close as possible to the lowest cost infrastructure is now becoming superseded by getting as close as possible to the customer base, as well as getting as close as possible to the raw material,» Ganis said. «And this plays out well for economies like Indonesia, but what we have to acknowledge is it will play even better if we start looking at it as […] more from a regional bloc, a natural bloc like the ASEAN.»