Investors are showing a growing preference for Chinese assets due to expectations of additional stimulus from Beijing, despite the potential for increased tariffs after the upcoming US presidential election.

Global money managers are not deterred by the possibility of heightened tensions with either Donald Trump or Kamala Harris as the new US leader. Instead, they are focusing on the supportive policies anticipated from China's government.

Market sentiment suggests that a more accommodative stance from the Chinese central bank could benefit local government bonds, although concerns remain about the stability of the yuan. Analysts believe that a second term for Trump, who has proposed a significant increase in tariffs on Chinese imports, may present greater challenges for China compared to a Harris administration. However, investors have been gradually reducing their exposure to Chinese markets as geopolitical tensions persist in the current climate of trade wars.