More than 70% of Americans hold unfavorable views of China, a historical high, as many find fault in its handling of Covid-19. Yet that hasn’t stopped Americans from staking their retirements on the nation through their mutual funds. U.S. residents have amassed roughly $700 billion worth of mainland stock over the years, mostly in the technology sector.
Government data may tell you there’s little at risk — Americans held only $154 billion of Chinese shares in 2017, according to the Treasury Department. This is a gross underestimation, Harvard University’s Antonio Coppola and his colleagues conclude. In a recent paper, the academics put exposure at $695 billion by 2017, or 4.5 times the official figure. The current level could be even larger, as the benchmark MSCI China Index has rallied more than 10% since then.
