KraneShares MSCI China ESG Leaders Index ETF Price & Performance (KESG)

A wave of investor withdrawals has struck China-focused ETFs, with billions exiting as the U.S.-China tariff dispute intensifies. The outflows have coincided with sharp declines in major funds, reflecting growing unease over escalating trade barriers and their impact on Chinese equities. This trend underscores heightened volatility in emerging markets.12

China's plastics manufacturing sector is under significant threat due to a shortage of U.S. ethane, a key raw material. With few alternatives available, many Chinese factories risk closure unless tariff exemptions are granted. The situation could have broad implications for global supply chains and labor markets if unresolved.34

Despite substantial outflows, major China ETFs posted daily gains of up to 4.6% amid ongoing U.S.-China trade hostilities. Funds like KWEB, FXI, and MCHI rebounded briefly, even as monthly performance remains sharply negative. This illustrates how short-term market sentiment can diverge from longer-term investor behavior in turbulent times.25