Investment Strategist Provides an Overview of Investing in Chinese Market

Today, China is one of the fastest-growing markets in the world and is expected to overtake the U.S. as the world’s largest economy by 2030. China’s population and consistent GDP growth rate have caused the Chinese market to be of considerable interest to investors from around the globe. Before investing in the Chinese market, however, international investors should possess foundational knowledge regarding the nuances of the Chinese market. Ryan Donovan Granger recognizes the hardships international investors have penetrating new markets and hopes his experience in China investment strategies can help these investors better understand the Chinese market.

China’s Economic Statistics

During the COVID-19 pandemic, the Chinese economy was negatively impacted and saw widespread unemployment and factory closings. However, investors can look at China’s 2019 statistics for a better understanding of the Chinese economy and its strengths. In 2019, China’s economic statistics showed:

Unemployment Rate: 3.64%

Gross Domestic Product: $23.4 Trillion

GDP per Capita: $8,041

Inflation Rate: 2.8%

Pros and Cons of Investing In China

Similar to all other markets, the Chinese market has a variety of pros and cons for investors. Before making any major financial investment, Ryan Donovan Granger encourages investors to thoroughly research the current Chinese market and its trends.

Benefits:

Global Status: Today, China holds a significant portion of U.S. debt and is expected to become the largest economy in the world by 2030. This means that China will hold significant sway in global politics as well as manufacturing.

Strong Economic Growth: Today, China remains one of the fastest-growing major economies in the world, reporting high single-digit economic growth consistently over the past two decades.

Risks:

Age demographics: One of the major factors attributed to China’s economic success has been its young workforce; however, with its aging population, this could lead to a labor shortage and an increase in manufacturing in the future.

Social Instability: Within China, the 1 percent own more than one-third of the total national household wealth while the poorest 25 percent of the population own less than 2 percent. This disparity of wealth could potentially lead to social unrest and capital outflows in the future.

Less Predictable Government: The Chinese government is less predictable than democratic governments

Invest Through a Market Maker or Affiliate Firm

It is important to note that not all Chinese companies trade on U.S. stock exchanges, and in order to trade within Chinese markets more successfully, investors will need to possess an in-depth understanding of three major exchanges:

Hong Kong Stock Exchange: The largest stock exchange company in China, Hong Kong Stock Exchange lists over 2,400 companies within their market, for a total capitalization of $38.2 trillion

Shanghai Stock Exchange: Currently the second-largest stock exchange in terms of capital raised, the Shanghai Stock Exchange today has a listed market cap of $6.98 trillion.