Bloomberg reports that overseas investors are sticking with China’s stocks and bonds even as the country’s crackdown on leverage wipes almost $500 billion from the domestic market. While the Shanghai Composite Index is close to an October low, the MSCI China Index – composed almost entirely of Hong Kong and US listings – is holding on to this year’s 17% gain. The disconnect also applies to fixed income, with international funds owning the most sovereign debt on record and the extra cost that investors demand to hold Chinese companies’ dollar bonds over Treasuries near a decade-low. Mainland markets have struggled under the government’s campaign to trim risk in the financial sector, making stocks the least linked to the offshore index since 2006. With history showing sentiment can flip quarter to quarter, international traders are riding on a bet that solid corporate and economic data will continue to support the divergence.