As India’s investment community watches this growth, the question arises: Should it invest in China and, if so, how?
Why is the Chinese market booming?
China’s economic recovery has been driven by targeted government interventions, including a stimulus to boost consumption, revive the real estate sector and stabilize stock markets.
According to Radhika Gupta, MD and CEO of Edelweiss Asset Management, the Chinese market valuation is currently favorable, despite the post-COVID slowdown.
“China’s market, being the second largest globally, offers attractive valuations for long-term investors,” Gupta said.
However, he warned against short-term trading, given the volatility of the market.
Feroze Azeez, joint CEO of Anand Rathi Wealth, agreed that China’s resurgence offers interesting opportunities for Indian investors, but suggested a structured approach.
“Invest through mutual funds managed by experienced professionals can be a prudent strategy,” Azeez said.
Key issues for investing in China
When exploring investment opportunities in China, Gupta highlighted several themes that are likely to benefit from the current economic climate:
Technology:
China’s advances in artificial intelligence (AI) and technological innovation are expected to drive future growth.
Insurance sector: With reforms underway, the insurance sector shows potential for change.
Carbon neutrality and electric vehicles: As the world’s largest electric vehicle market, China is well positioned to benefit from the global shift towards sustainability.
Real Estate and Home Improvement: Government stimulus can revive the real estate sector, indirectly boosting the home improvement and construction sectors.
Gupta recommends caution when it comes to financial and banking sectorsthat could face more uncertainty.
Investment Options for Indian Investors
There are several ways for Indian investors to gain exposure to the Chinese market, particularly through mutual funds and ETFs that focus on Chinese stocks.
Feroze Azeez highlighted some high-performing funds:
| Fund name | Investment type | Focus |
| Axis Greater China Equity Fund of Funds | mutual fund | Greater China Stocks |
| Edelweiss Greater China Offshore Equity Fund | mutual fund | Greater China Stocks |
| Nippon India ETF Hang Seng BeES | ETFs | Complete Hang Seng Index |
| Mirae Asset Hang Seng TECH ETF | ETFs | Hang Seng Tech Stock |
Both Gupta and Azeez highlighted the importance of diversification and cautioned against focusing solely on technology stocks as that would increase the level of risk.
Investment considerations
While the Chinese market offers attractive opportunities, experts recommended a long-term investment strategy.
Gupta emphasized that “the China story is great for long-term investors,” but also cautioned against short-term tactical trading due to market volatility.
Both Azeez and Gupta advised taking advantage of mutual funds with experienced managers for better risk management and diversification.
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