(Bloomberg) -- Soros Fund Management is steering clear of investing in China, said Dawn Fitzpatrick, the firm’s chief investment officer.

“We are not putting money into China right now,” she said in an interview with Erik Schatzker at the Bloomberg Invest virtual conference on Tuesday.

Fitzpatrick investors need to be “really careful” about putting cash into U.S.-China listings, she said.

Investors are questioning the viability of investing in China after the government began clamping down on industries ranging from tech to online education. George Soros has criticized President Xi Jinping’s policies and said in a Wall Street Journal op-ed last month that “pouring billions of dollars into China now is a tragic mistake.”

Investors have been caught by surprise by what China is doing and the extent of economic damage the government is willing to tolerate for its plan, she said.

Chinese companies currently traded in the U.S. will largely have to delist and move to Hong Kong, said Fitzpatrick. It will be “a while” before early-stage venture companies in China have an avenue to go public, she added. As a result, though some big names might go public near-term in Hong Kong, overall, the path from private to public in China is going to take longer. 

“For twenty years, Chinese tech companies having Western capital and a Western vested interest in their success very much suited China’s goals. They don’t need that anymore, so they can take their $700 billion and take it back onshore into Hong Kong,” Fitzpatrick said. “And I think that’s what they’re going to do.”

Fitzpatrick has been at the helm of the $27 billion fund for four years. Almost all the money she oversees is on behalf of the Open Society Foundations, the philanthropy Soros uses to promote democracy, equality and human rights.

Here are some other highlights from the interview: 

  • The firm put $5 billion to work in March 2020 amid the market turmoil caused by the Covid-19 pandemic, and since then has built its cash buffer back up. If there were a crisis today, it could put another $5 billion to work “in pretty short order”
  • Recovery stocks are still too cheap and should be bought. “These companies have learned to do things better” and the U.S. consumer is now “flush with cash, and they want experience not goods”
  • Cryptocurrencies have gone mainstream. “We own some coins -- not a lot -- but the coins themselves are less interesting than the use cases of DeFi and things like that”


(Updates with comments starting in fifth paragraph.)

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