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Anonymous
I'm still trying to figure out whether investing in China is suitable for me and I'm able to stomach the risk. Thanks
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Darren
11 Aug 2021
Mechatronics Engineering at Nanyang Technological University
I guess the recent crackdowns seem pretty scary for the bluechip investors, but in the long term, this crackdown may very well be beneficial for the smaller companies.
Also I would still invest in China as there is still so much potential for them. They are competing directly with the US economy in major sectors like tech. There is also an incredible momentum with China's Tech capabilities eg. renewable energy equipments, social media, modern logistics, modernized metro subways & high speed rails, robotics, autonomous vehicle. Overall there is still so much opportunities for China.
China has been one of the first few countries to recover financially fast from the pandemic. Also, there are predictions that China will surpass US by 2030. Urbanization rates have also grew to over 60%.
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Hmmm....I heard President Xi is a fanboy of Mao who keep spouting "不忘初心“ aka to remain true to our original inspiration
And what are the physical manifestation of communism's "original inspiration" back in 1950s-1960s like under Mao?
1) 打土豪,分田地 aka destroy the landed gentry
2) 消灭私有制 aka eliminate all forms of private ownership
3) 公私合营 aka nationalization of private business
Deng Xiaoping, Jiang Zheming & Hu Jingtao rejected Mao's Cultural Revolution which led to China's economic reforms since the 1980s till 2010s. Now, you had Xi Jiping who had only primary level education (due to Down to the Countryside Movement) and only rely on Mao's sayings/teachings to run the country.
Just recently, Shanghai had cancelled final exams in English for primary school while mandating "Xi Jiping School of Thought" as compulsory education at the same time.
Not sure whether I want to bet on the long-term future of such a country, but who knows I might be scare-mongering?
Nontheless, wish all those who are long-China equites very handsome returns in the future!
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Regulations, Regulations regulations.
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Hand of god. (Regulatory)
Compliance against free market play?
Financial reports transparency?
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3 reasons for:
1) great growth prospects
2) diversification
3) very innovative businesses
3 reasons against:
1) political disputes with other countries
2) strict government regulations
3) not so transparent accounting practices
However imo, china is definitely a market that investors cannot simply ignore. Instead, we have to find ways to manage our risk exposure. For instance, instead of investing too heavily in chinese tech, we can share in on their growth by buying an etf made up of A shares, which are companies listed on Shang hai and contains their largest financials, industrial and consumer sectors.