China Investment Trends for 2021
Since first opening up to foreign trade and investments in 1979, China has become one of the world’s fastest-growing economies, with real annual gross domestic product (GDP) growth averaging 9.5% through 2018. This unprecedented growth has been described by the World Bank as “the fastest sustained expansion by a major economy in history.” Although China, like many other world powers, was impacted by the COVID-19 pandemic, its economy was quick to recover and is expected to return to its average growth by 2021. Ryan Donovan Granger, an investment strategist with experience in Chinese markets, has closely watched China’s economic recovery and investment trends throughout 2020 and 2021. As of August 2021, Ryan Donovan Granger believes the following investment trends will likely shape the Chinese market for the latter half of 2021.
Tech Infrastructure
Recently, the Chinese government released a plan to become the world’s leading country in artificial intelligence by 2030. For many years, China has been one of the world leaders in science and manufacturing; however, it plans on entering the global tech competition by updating the country’s technological infrastructure with the rollout of 5G and blockchain. While the United States remains one of the world’s most dominant technological powers, China’s technological infrastructure plans may allow the country to move past the United States in regard to technological innovation.
Great Bay Area Growth
In recent years, China’s Greater Bay Area has grown into the country’s economic powerhouse, making up approximately one-third of China’s total economic output and 50% of the nation’s total patent application. The Greater Bay Area includes major cities like Hong Kong, Macau, Shenzhen, known as the Silicon Valley of China, and Guangzhou, the “factory of the world.” Prominent companies headquartered in the Greater Bay Area include smart device manufacturer Huawei, tech conglomerate holding company Tencent, and Ping An Group, the largest insurer in China.
Green Energy
Similar to other prominent global markets, China has announced plans to invest heavily in the nation’s green transition. Although China remains the leading CO2 emitter in the world, the country’s recent five-year plans has detailed the country’s interest in investing in green infrastructures such as electric car charging stations and e-bus fleets. Investors are encouraged to invest in Chinese sectors such as New Energy Vehicles (NEV), which have continued to grow exponentially during the past ten years, with companies like NYSE leading the sector. In addition to NEV, investors can expect solar, wind, and nuclear markets to grow and with rising international interest in environmental, societal, and governance stocks.
