From 20 to zero: What is not to love about Chinese equities?

Weighing up the pros and cons of investing in Beijing

Andrew Milligan

Andrew Milligan

With many investors keen to take profits on US equities after their recent strong performance, more are looking at emerging market assets.

Indeed, it has recently been suggested by one economist that sizeable exposure to China is essential. I disagree and suggest the correct figure should be 20% or zero. Let me explain. Two arguments put forward for holding Chinese equities are not very persuasive, namely strong economic growth and very attractive valuations. It is an old story that China will be one of the faster growing economies over coming decades, overtaking the USA on some estimates. President Xi Jinping's ambitious plans to double the size of the economy by 2035 would imply an annual average growth rate of 4.7% to...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week


More on Asia

At the end of June this year, TSMC was in 2,336 funds’ top ten with 2,062 of those being active funds.

Stock Spotlight: Taiwan Semiconductor powers on despite geopolitical tensions

Strong investment case

Kathleen Gallagher
clock 15 August 2022 • 4 min read
Yu Shimizu of SPARX

Abe's transformation of Japanese corporate governance will live on

Abe's influence will persevere

Yu Shimizu
clock 15 August 2022 • 4 min read
Dan Green, portfolio manager at Martin Currie

Three sectors that will benefit from the digital economy

E-commerce, the auction industry and cybersecurity

Dan Green
clock 12 August 2022 • 3 min read