SINGAPORE, April 27 Reuters Decadeslong foreign bullishness on China39;s capital markets is breaking down, investment flows and interviews with fund managers suggest, with a new era of uncertainty fuelled by geopolitical risks and U.S. investors especially wary.

There have been ample excuses to buy China as the world39;s second biggest economy gathers steam.

Postpandemic recoveries in exports, property and shopping have run harder than expected. Stock market returns are solid. Jack Ma39;s reappearance and plans to break up his Alibaba empire were also seen as ending a few years of regulatory crackdowns.

But big, longterm foreign investors, are missing. Their absence, and asset managers39; reasons for it, reveal a wariness in the investment community over how to price new risks for capital as China becomes a great power and a great U.S. rival.

It is unlikely to be resolved quickly even if the markets keep rallying and China economy keeps global growth ticking.

It39;s around capital preservation, not really the returns, said Hayden Briscoe, AsiaPacific head of multiasset portfolio management, at UBS Asset Management in Hong Kong.

Foreign money at the moment, particularly from the U.S., is reluctant to invest, said Briscoe. He himself is positive on China, but said many managers are steering clear after seeing wartime sanctions erase the value of Russian investments.

They are still looking at geopolitical risk and the Russia experience recently probably makes them…