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Chinese funds are seeking new capital sources in the Middle East and other markets, managers say, in a shift that could reshape investment flows as diplomatic tensions and other risks drive many U.S. investors out of the country. Seven China equity funds, including hedge funds and mutual funds, running more than $500 billion in combined assets, told Reuters they visited the Middle East this year to raise money, three of them for the first time. Mideast investors are also keen to allocate more resources to China as they can benefit from lower valuations and the effects of government stimulus to support the recovery.

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