General Question

JonnyCeltics's avatar

How can I invest in the Chinese economy (currency, stocks, etc.)?

Asked by JonnyCeltics (2721points) August 17th, 2010

I’ve spent a long time in China, and although this isn’t secret knowledge, they are clearly growing…but how to invest?

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12 Answers

bob_'s avatar

You could invest in Chinese companies listed in the NYSE. See a list here.

JonnyCeltics's avatar

What about investing in like the HK or Chinese stock markets? Or the Yuan?

bob_'s avatar

@JonnyCeltics It is my limited understanding that there might be some restrictions on foreigners participating in Chinese capita markets. You should consult a professional for that.

Coloma's avatar

I too would be interested in learning more, I will follow this thread as it unfolds.

I was in Taiwan last spring and the economy is very strong, a very progressive country.

bob_'s avatar

@Coloma Um, Taiwan (or the Republic of China) is not the same as mainland China (or the People’s Republic of China). Their economies (and their risks) are very different.

Coloma's avatar

@bob_

I know, Taiwan is not part of the PRC, it is an island off of mainland China formerly known as Formosa.

I was very impressed with it’s progressiveness and strong economy and learned much from my host who’s family has been there forever.

asmonet's avatar

I read an article by an economist a few months ago that explained how they were growing now, but pushing themselves to the limit in terms of their workforce and their social infrastructure. The conclusion was that China would have a fairly serious decline if they kept going the way they have been. I’mma see if I can find it.

As for how you would go about investing, you really need to see a professional about it.

Tobotron's avatar

@Coloma the only problem with Taiwan is you never know what’s gonna happen as far as China is concerned, more of a political uncertainty but your prob right, anywhere’s better to invest, than the west…ooo little catch phrase there haha…

Tobotron's avatar

@asmonet I think the problem China is having at the moment isn’t the lack of work force, but rather them building new developments and residential and there’s no one to snap them up because the money just hasn’t filtered through the chain yet, surprise surprise…

same in Kazakhstan, they’ve built a new city, but construction stopped because no one could afford to buy anything they were building, so now you have essentially an empty city, on the other end of the scale you have abandoned cities and towns in parts of Russia…

just can’t win can ya ;)

RareDenver's avatar

Stratton Street Capital’s Remnibi Bond Fund is worth a look

Rarebear's avatar

Personally, and this is just me, but investing in China is only wise if it’s a small part of your portfolio. China’s economy is booming in large part because they are buying dollars and euros to keep their currency artificially low. The low currency causes a trade imbalance where they export far more than they import, which gives an influx of cash to build their infrastructure. The US is not in danger of defaulting on the loans for a number of reasons, not the least of which is that they can print money, but as you probably know (and if you don’t, you should be even considering this investment) several EU member nations are on the brink of economic collapse, with one, Greece, just having to have been bailed out.

In short, China’s economy is being held up by the house of cards of international economics. As long as they can keep borrowing money, they can keep growing. It’s in China’s interest, therefore to encourage a cheap dollar as they can borrow with lower interest rates. But that means that that will further the trade imbalance. Make sense?

LuckyGuy's avatar

Caution. The economy is growing and money is being made. However, their system is not transparent. If a profit is to made, it will be to a Chinese concern and not a foreign investor. You have no recourse and cannot initiate effective legal action. If by chance you happen to make a small profit (because they let you) there will be hidden fees to discourage/prevent you from taking the money out of the country.
Don’t get sucked in.

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