The traditional strategy of buying gold during turbulent times is no longer a reliable safe haven. Amid ongoing tensions in the Middle East, global risk assets have declined. Surprisingly, traditional safe-haven assets like gold and U.S. Treasuries have also experienced similar downward movements. This reflects both short-term liquidity pressures and a broader loss of confidence in dollar-denominated assets amid global governance disruptions.

In this context, investors are increasingly questioning what truly constitutes a safe asset. Chinese assets may present a rare alternative. Stable political and economic conditions, strong national defense, comprehensive supply chains, and a leading super-energy system are positioning China as a "Noah’s Ark" in a stormy global financial and political landscape. As the world seeks safety and stability, attention is naturally turning toward the East.

While this shift may not immediately reflect in asset prices, the underlying momentum is undeniable. A spring season for Chinese assets may be on the horizon.

When Safe-Haven Assets Fail to Protect The old adage of "buying gold in troubled times" has not held true. Since the U.S. and Israel launched attacks on Iran on February 28, the spot price of London gold has fallen by $602.08 per ounce, a drop of over 11% by April 8, making it one of the hardest-hit major assets during this conflict.

This is not an isolated case. Since the conflict began, traditional safe havens like U.S. Treasuries and the Swiss franc have also lost their appeal. The yield on the 10-year U.S. Treasury note has risen by more than 20 basis points in recent weeks.

Liquidity pressures are evident. Wang Han, chief economist at Industrial Securities, noted that synchronized movements across multiple asset classes are largely driven by fluctuations in global liquidity. He explained that even before the conflict, advanced economies faced structural issues such as high government debt, elevated stock valuations, surging financing demands from AI firms, and emerging financial fragilities. Against this backdrop, major central banks had already been inclined toward loose liquidity policies.

"After the conflict erupted, inflation expectations rose, increasing the likelihood that accumulated financial risks would materialize. This has heightened the risk of passive liquidity tightening," Wang said. In such an environment, assets that previously benefited from loose liquidity—whether U.S. tech stocks, emerging market equities, or gold—face near-term pressure regardless of their long-term fundamentals.

Yang Chao, chief strategist at Galaxy Securities, expressed a similar view. He suggested that during short-term geopolitical conflicts, highly leveraged investors often face margin and liquidity constraints. To cover losses or meet redemption demands, they tend to sell the most liquid assets first, which ironically includes previously high-performing assets like gold.

Moreover, with the widespread adoption of quantitative trading and cross-asset allocation, investor behavior has become more synchronized. A rapid decline in risk appetite can trigger concentrated deleveraging across portfolios, leading to correlated asset movements and temporarily weakening the hedging function of traditional safe havens.

However, the underlying reasons for the diminished safe-haven status of U.S. Treasuries and gold differ. The decline of U.S. Treasuries reflects a broader narrative shift. Yu Jingwei, chief macro asset allocation analyst at CITIC Securities, pointed out that the U.S. military's performance in recent actions against Iran may accelerate global recognition of America's declining power projection capabilities.

Once the immediate impact of conflict on market sentiment subsides, the current trend of a strong dollar and weak gold and precious metals could undergo a long-term reversal. In contrast, Asian equities, particularly A-shares and H-shares, may outperform U.S. and European stocks over the long run.

Wang Han added that shifting global power dynamics, including the relative decline of U.S. "hard power," are eroding the dollar's credibility as a hard currency. Unilateral U.S. policies have also widened rifts within transatlantic alliances, disproportionately harming non-U.S. advanced economies. This has loosened the link between developed-economy currencies and true hard assets, with non-U.S. currencies weakening more noticeably. These trends were evident in 2025: the dollar depreciated significantly against physical assets, while traditional safe-haven currencies like the Japanese yen lost their appeal.

From "Credit Safety" to "System Resilience" For a long time, gold, the U.S. dollar, the yen, and U.S. Treasuries have been regarded as core safe-haven assets. But as the pricing logic of major global assets evolves, the definition of safety is also changing.

"Traditional safe assets rely heavily on sovereign credit and stable global financial秩序. Their core logic is 'credit backing and liquidity premium,'" said Yang Chao. However, against a backdrop of frequent geopolitical conflicts, rising inflation, and a partial reversal of globalization, the concept of "safe assets" is shifting from单一的"credit safety" to a more multidimensional notion of "system resilience."

He believes that, over the longer term, safe assets will not merely be financial instruments that appreciate during crises. Instead, they will be asset portfolios capable of maintaining economic stability, clear growth trajectories, and strategic resource and industrial support amid complex external environments.

Zhang Jundong, executive general manager and macro analyst at CICC Research, noted that as the old world order weakens and a new one has yet to emerge, geopolitical conflicts are likely to increase. Assets that help nations withstand such risks will define safety in the new era. This implies a shift in allocation: from financial to physical assets, from U.S. to non-U.S. markets, and from growth to value styles.

"Today’s world is entering a period of turbulence and transformation. Weak global growth, tech competition, and misguided governance by hegemonic powers have led to无序 in international interactions," Wang Han stated. In such times, the core foundation of "safe assets" lies in the ability to effectively address risks across economic, technological, and geopolitical dimensions while contributing stability and positive momentum to global development.

Global Capital Seeks a New Ark As traditional safe assets lose their appeal, where will global capital find a new safe harbor? Chinese assets are emerging as a viable option.

Against a backdrop of diminished peace dividends, heightened geopolitical risks, and supply chain restructuring, "safety and resilience" are becoming central to asset pricing. Zhang Jundong emphasized that global capital is increasingly focusing on assets that enhance national security—such as physical assets and highly productive capital. Meanwhile, de-dollarization trends are driving a long-term rebalancing of global funds, benefiting emerging markets, especially Chinese assets.

"Amid high global uncertainty, Chinese assets deserve a 'safety premium,'" Wang Han asserted. China’s institutional arrangements, economic structure, and development path are long-term advantages that stand out in today’s volatile environment.

Chinese assets’ safety is underpinned by several factors. Wang highlighted four key aspects: First, strong energy security. China maintains high energy self-sufficiency and is accelerating its energy transition, making it more resilient to global price volatility and supply disruptions. Second, a complete industrial and supply chain system. The breadth, integration, and toughness of China’s industrial ecosystem are unmatched by other economies in the short term. Third, a robust national defense that safeguards development and economic security. Fourth, highly independent and stable policies. Unlike some economies susceptible to external pressures or prone to adventurism, China’s macro policies are both objectively independent and subjectively consistent, guided by clear strategic vision.

Xia Fanjie, senior strategy analyst at China Securities, added that Chinese assets’ status as "safe assets" stems from both internal improvements and external避险demand. Geopolitically, China remains the only major power not involved in ongoing conflicts. Economically, positive early-2026 data, mild inflation recovery, strong March PMI, and seasonal "golden March, silver April" effects support the outlook. From an energy security perspective, ample strategic oil reserves and a diversified energy supply system help China avoid energy crises, strengthening its manufacturing advantage and benefiting both "Made in China" and RMB-denominated assets.

"Against a multipolar backdrop of supply chain restructuring and rising geopolitical risks, the scale, completeness, and policy stability of Chinese supply are becoming anchors for global re-stabilization," Zhang Jundong concluded.