China has been the fastest growing emerging market in the world for the last decades. On the other hand, its financial markets have often encountered turbulences. The Shanghai stock exchange has witnessed major incidents in 2007 and 2015, keeping foreign investor cautious about investing in PRC stocks.
Nevertheless, in the last years investors have started looking at China with increasing interest, paying particular attention the Tech Giants. As of August 2020, eight of the most valuable companies worldwide focus on tech, and two of them are from China. Looking at the rise of Asian technology equities, it comes naturally to draw a comparison between the famous Silicon Valley stocks and the upcoming Chinese competitors, wondering if their growth will equal or even surpass them. It is interesting to observe how Ray Dalio, the billionaire investor of Bridgewater Associates, has included Chinese stocks in his famous all-weather strategy. Among his top picks there are JD.com, Alibaba, Baidu and Tencent, as Bridgewater recent stocks up show.
How to invest on Chinese Stocks
Only qualified foreign investors are authorized to invest directly on the Chinese stocks and trade A-shares (local stocks denominated in chines yuan traded in Shanghai and Shenzhen).
Foreigners can trade A-shares through the QFII -Qualified Foreign Institutional Investors Program, providing access to 3560 companies listed on Chinese Stock exchanges.
Qualified foreign investors need to reside in China to access to A-shares (with specific exceptions in particular cases).
How to purchase Chinese stocks if you don’t live in China
If you do not reside in China, but you are interested in investing in its stocks, these are the best ways to do it:
- Invest on the Hong Kong Stock Exchange
- Purchase Mutual Funds (ETFs) tracking Chinese stocks.
- Purchase Exchange traded funds (ETFs) tracking Chinese stocks.
- Purchase ADR, American depositary receipt.
How to start
Keen to invest but do not know where to start? First of all, you should open a brokerage account.
Fidinam (Hong Kong) Limited can help you to open a brokerage account using a locally incorporate limited company.
Contact us today to start immediately!
