Despite the dizzying technological innovations in China and the investment opportunities that come with them, Team Super chief investment officer Seamus Collins says some risks, make him hesitant to allocate large chunks of the portfolio to the world’s second-largest economy.

One risk is weak investor protections. Collins said the interests of all investors – and foreign investors in particular – will always come second to the Chinese government’s national agenda.

“There’s a couple of things with China I feel very strong about. One is investor protections are very weak, and in fairness to the Chinese government, they’ve always been really clear when – especially as a foreigner but even as a domestic investor – you are not a priority,” Collins told the latest episode of the Investment Magazine CIO series.

“You can love some of the individual thematics that are coming out of China and love what they’re doing, be impressed by what they’re doing, but still feel a fair bit of reticence to carry too much of a portfolio.”

This April, Beijing blocked Singapore-based but China-regulated AI start-up Manus from being acquired by technology giant Meta on the grounds of potential technology export control violations. It is a demonstration of the risk that foreign investors have to deal with as the government can move rapidly on deals and transactions of interest to national security.

Team Super head of equities and responsible investment Susan Chau has just returned from a fact-finding trip to China, while other super funds are also undertaking them, which has generated substantial enthusiasm for its domestic market.

“The big unknown that everybody can dwell on is innovation in China and the fundamental reshaping of industries from China. You can argue till you’re blue in the face on whether their AI models are a week, a month [away] or already equivalent to the US giants. I’m not sure as to which is the case,” he says.

“When people go to China and they walk through the fully dark factories that are just full [of] robotics and automation, and you see some of the growth, it is very enticing. People come back from those tours [saying] ‘you know, we’ve got to go all in’.

“[But] I think there are other risks.”

On the other side of the narrative, Collins said he “disagreed” with the pivot away from US assets that started during the height of Liberation Day tariffs last year. Despite policy and geopolitical uncertainties created by the Trump administration, Collins said the country is still the “greatest engine of innovation and growth” in the world.

“To some degree [we’re trading away from the US], certainly if you’d gone into Korean semiconductors and Japan had a great year.

“But the question then becomes, okay, well, what then if not the US? If not the S&P 500?”