New York-based BlackRock is the first foreign-owned company allowed by Beijing to operate a wholly-owned business in China’s burgeoning mutual fund industry. The firm launched the mutual fund and a series of other investment products for Chinese consumers on Aug. 30. Chinese investors piled into the mutual fund with such gusto that BlackRock was able to close the subscription period in a few days rather than two weeks as originally planned.

BlackRock’s success in mobilizing so much capital in so little time offered a bankable retort to billionaire George Soros who, in a Wall Street Journal op-ed published Tuesday, lambasted the firm’s foray into the world’s second-largest economy as a “tragic mistake” that would “damage the national security interest of the U.S. and other democracies.”

In the commentary, entitled “BlackRock’s China Blunder,” Soros also deplored a mid-August recommendation from BlackRock’s Investment Institute that investors triple their allocations in Chinese assets.

“Pouring billions of dollars into China now,” Soros predicted, is “likely to lose money for BlackRock’s clients.”

Maybe so. But a horde of rival money managers is eager to emulate BlackRock’s “blunder.” Fidelity Investments won a license from China’s Securities Regulatory Commission last month. Bloomberg reports that Invesco, which has operated a joint venture in China since 2003, wants to increase its China assets by more than 40% to $100 billion by 2023.

This April report by Z-Ben Advisors, a Shanghai-based consultancy, finds that JPMorgan Chase is the top foreign asset manager in China, followed by UBS Group, Invesco, BlackRock, Schroders, and Fidelity. According to Bloomberg, other global asset managers waiting for regulatory approval to operate fully-owned subsidiaries in China include Neuberger Berman, Van Eck Associates, AllianceBernstein and Schroders. None of these firms is bolting for the exits in China despite a ten-month regulatory blitz that has upended the nation’s tech, education, and entertainment sectors, and triggered a $2 trillion sell-off in China stocks traded on overseas exchanges.

Among global investors, sentiment on China is now starkly divided. At one extreme are uber-bears like Soros and Paul Marshall, co-founder of $59 billion investment firm Marshall Wace, who three weeks ago declared U.S.-listed China stocks “uninvestable.” At the other are long-term bulls like BlackRock CEO Larry Fink, Blackstone’s Stephen Schwarzman, and Bridgewater Associates founder Ray Dalio, who in July dismissed Beijing’s regulatory moves as policy “wiggles” rather a than a fundamental retreat from private markets.

At a Bloomberg conference yesterday, Dalio doubled down on that assessment, declaring China “a part of the world one can’t neglect.”

But even if Dalio and his compatriots are right, a crucial question for global investors remains: How to invest in China now?

Fortune contributor Gregor Stuart Hunter has a terrific in-depth analysis of exactly that question that we published moments ago. Mobius Capital Partners founding partner Carlos von Hardenberg tells Gregor that investors can still find $200 million companies in China that will be worth billions tomorrow. But there’s a catch: you have to search “very, very hard.”

Gregor’s entire piece is worth your time.

More Eastworld news below.

Clay Chandler
clay.chandler@fortune.com

This edition of Eastworld was curated and produced by Nicholas Gordon. Reach him at nicholas.gordon@fortune.com  

Eastworld News

Changing direction

Singapore is wavering on its strategy of managing, rather than eradicating, COVID-19. As community cases rise to record levels, its government has delayed the next phase of the city’s reopening. However, as the city’s high vaccination rate keeps serious cases low, the government announced that it would focus on hospitalizations, rather than linked and unlinked cases, in its COVID reports. Fortune

Frozen out of China

Shang-Chi and the Legend of the Ten Rings, the latest film from Marvel Studios and its first with an Asian lead, has had a blockbuster U.S. release. Yet the film has not been approved for release in China, the world’s largest movie market. One reason: Shang-Chi’s original connection to racist Fu Manchu stereotypes. Fortune

Competition in Korea

Shares in Kakao and Naver fell on Wednesday after the head of South Korea’s ruling Democratic Party warned them against following the path of the country’s chaebol conglomerates by engaging in monopolistic behavior and ignoring the importance of market competition. Kakao runs South Korea’s largest messaging and social media platform, while Naver owns the messaging platform Line. Both companies have seen their share prices surge in recent months as people stay at home due to the pandemic. Bloomberg

More gaming controls

China's authorities summoned gaming companies like Tencent and NetEase to a meeting on Wednesday to ensure that developers and publishers implement the country’s new playtime restrictions for minors. Authorities also urged gaming companies to more strictly control their content, such as references to “gay love,” and to avoid a “solitary focus of pursuing profit.” In addition, sources with knowledge of the discussions say that Beijing will suspend approvals of new online games. Fortune

Muhyiddin returns

Just weeks after being ousted as Malaysia’s prime minister, Muhyiddin Yassin is back as the head of Malaysia’s pandemic recovery council. This opens up a path for his eventual political return, as Center for Strategic and International Studies fellow Sophie Lemière notes for the SCMP. In his new position, Muhyiddin can take credit for any positive COVID news, while any mistakes can be blamed on Malaysia’s current prime minister, Ismail Sabri. SCMP

Markets and Movers

Paidy — PayPal announced that it would acquire Japan’s buy-now-pay-later service Paidy for $2.7 billion. Despite Japan being the world’s third-largest market for e-commerce, nearly three-quarters of all purchases there are made in cash. Paidy has thrived in the market by allowing customers to make cash payments through Japan’s convenience stores.

Goldman Sachs — The investment bank has named Kevin Sneader, the former head of McKinsey, as co-president for the Asia-Pacific region, excluding Japan. It’s Goldman’s most prominent outside hire for Asia ever. Sneader was global managing partner for McKinsey from July 2018 to July 2021, but was voted out amid a debate on how to manage several scandals, including the consultancy's work with opioid manufacturers.  

Byju’s — Online educator Byju’s is accelerating its IPO plans. India's most valuable startup will likely choose a domestic listing instead of a listing overseas or a SPAC merger. India's stock markets have seen a record number of listings as investors look to alternate markets amid China’s crackdown. 

Sea — Southeast Asia’s most valuable company is hoping to raise $6.3 billion in what will likely be the region's largest-ever capital raise. Sea wants to further expand outside of gaming into e-commerce and fintech and enter more markets outside of Southeast Asia, like Latin America.

China budget — China may have its first balanced budget in four decades. Revenue and expenditure were almost perfectly balanced in the first seven months of 2021, in contrast to the looser fiscal policy of other major economies. This is partly due to slashed spending, including a 36% decline in spending on environmental protection. 

Final Figure

7.6%

Hong Kong’s economy expanded in the second quarter of 2021, growing 7.6% from a year earlier as the city recovers from 2019’s protests and 2020's COVID control measures. The city’s pace of growth now equals Singapore’s for the first time since 2008. Hong Kong has recorded almost zero local cases of COVID-19 over the past few months as Singapore struggles with a continued Delta outbreak.