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China is on course to be the world’s largest economy by 2030, which could be the most transformative development in financial markets in the coming decade.
In our view it is the right time to get one step ahead of this opportunity – by investing actively with the right partner to help you navigate a changing market.
Click the button below to jump to our latest investment insights about China, and explore the rest of this page to learn more about this dynamic region.
Did you know that
The % of the Chinese population living in urban areas has tripled to 60% since 1980
Source: World Bank
Did you know that
China exported USD 2.5tn of goods in 2019, making it the world’s largest exporter by value
Did you know that
Increasingly an innovator, China now accounts for one third of the world’s 5G patent filings
Source: IPlytics as at 03/2019
Did you know that
Post-Covid-19, China is accelerating new infrastructure such as 5G networks and data centres
Source: xinhuanet.com as at 05/03/2020
Did you know that
China has the highest number of “tech unicorns” globally
Source: Hurun Research Institute and Nikkei Asian Review as at 21/10/2019
Did you know that
In 2019, China surpassed the US as the top filer of international patent applications
Source: World Intellectual Property Organization, 2020
China – the investment opportunity
Already the world’s second-largest economy, China is set to become the biggest global economy by 2030. Reforms are shifting its focus to high-value sectors such as robotics, biotech and tourism.
Given the scale of the opportunity, we think investors’ current allocations to China underrepresent the potential rewards – and we expect investors to increase their exposure steadily.
As more investors look to China, “buying the index” may not provide the right kind of access, since China is widely underrepresented in benchmark indices. An active, selective approach may provide better exposure.
China’s markets have been volatile, though their institutionalisation and transparency are improving. Yet it’s still an unfamiliar market, emphasising the need to invest with conviction – and the right partner.
Investing with conviction and the right partner
Allianz Global Investors has more than 25 years of experience investing in Chinese equities.
With our Shanghai office and strong presence throughout the region, we are well-positioned to conduct in-depth research, meet with management teams and understand the regional context.
Hear from our experts on China
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7 key facts investors need to know
Once largely out of reach to foreign investors, China’s stockmarkets have opened up, attracting USD 146 billion of investor capital in the last six years through the Stock Connect programme alone. China A‑shares have grown increasingly accessible, and they give investors more direct access to China’s compelling growth story.
Lower correlations can help benefits to portfolios
China A-shares have a historical correlation of 0.21 with global equities, and 0.58 with Hong Kong-listed China stocks. This suggests that investing in A-shares could bring additional diversification benefits to portfolios. The gradual institutionalisation of China A-share markets is expected to result in a higher correlation with their offshore counterparts – though this process could take many years.
China A-shares have low historical correlations with major equity markets
List of benchmarks
MSCI China A Onshore Index
MSCI China Index
HK-listed China stocks
MSCI AC Asia ex-Japan Index
Asia-Pacific ex-Japan equities
MSCI Emerging Markets Index
Global Emerging Market equities
S&P 500 Index
MSCI Europe Index
MSCI World Index
Source: Bloomberg, Allianz Global Investors as at 31/1/2020. Correlation data is calculated based on historical return of respective MSCI indices for the past 10 years, using weekly USD return.
China reaches for the STAR market
China’s nascent STAR market provides a platform for the technology and science firms that increasingly underpin the country’s growth story.
There is no guarantee that actively managed investments will outperform the broader market. Foreign markets may be more volatile, less liquid, less transparent, and subject to less oversight, and values may fluctuate with currency exchange rates; these risks may be greater in emerging markets. Equities have tended to be volatile, and do not offer a fixed rate of return.
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