The reputation of China is that it is the world’s low-cost manufacturer. Made in China is not just a label, but a statement. However, there is a shift going on now as China is transforming itself from a low-cost manufacturer to a technology and healthcare innovator. Furthermore, China is moving up in the world. It has moved past Europe in terms of being a larger contributor to the world’s GDP. It is also expected by some analysts to overtake the United States as the world’s largest economy in 2030.
Why now could be a good time to invest
2021 was a tough year for China. It had a housing crisis that nearly resulted in spillover to the whole economy. There was a pivot by the central Gov’t towards more socialist roots with the independence of companies being challenged. There was also credit and fiscal policies tightened to reduce growth. However, while most of the world is tightening China is now easing. The PBoC has eased rates and fiscal policy is expected to help stimulate China’s growth. Goldman Sachs also point out that domestic consumption is becoming more important as Gov’t consumption remains steady.
Invest in China for the medium term
There are different ways to invest in Chinese shares. One way is to buy into the Index with a trusted broker like HYCM who has access to those markets.
Another way would be to invest in an ETF or perhaps the MSCI Emerging Markets index which has a strong Chinese representation.