Can China deliver the returns investors expect from Emerging Markets?

The mantra for investing in Emerging Markets is higher risk, higher return. CAMRADATA’s latest whitepaper on China explores why this is the case, along with the risks and benefits of investing in China today.

The report looks at how the Chinese State supports business growth; where Chinese companies outcompete global rivals; and which industrial sectors will flourish in the years ahead, as investors return to China after the disruption of the pandemic years.

The whitepaper includes insights from firms such as, AllianceBernstein, Mackenzie Investments, Value Partners, Mercer, RisCura and WTW who all attended a roundtable hosted by CAMRADATA in London in July.

It highlights that for most Western investors two distinct means of accessing China exist: via the offshore market, notably Hong Kong, and the mainland via A-shares.

The report questions if the future is in Greater China strategies covering the entire region, despite this relatively new asset class not having a long track record; and the impact of unexpected events and market reactions in the first half of 2022.

It goes on to consider State-owned Enterprises (SOE) which are some of the best companies in China and globally competitive; the Beijing government’s e-commerce crackdown, and the ESG and sustainability challenges in China.

It concludes on a positive note that there are now up to one thousand investable companies in China growing at a rapid rate; hundreds which have the potential to become multi-billion dollar companies.

Natasha Silva, Managing Director, Client Relations, CAMRADATA said, “It’s puzzled early adopters why Chinese investments have not yielded the returns that match economic growth. This is often explained away as the mismatch between the economy in total and investable securities.

Our new whitepaper explores these issues, as well opportunities for investors in the offshore and mainland markets and considers if it is the right time for investment in China, given geopolitical risks and economic uncertainty.

It also looks at emerging trends such as how China’s 2060 carbon-neutral framework which addresses climate change is starting to impact equity investors with sizeable investments in China A-shares.

This report is a fascinating insight into China’s market and where the opportunities are for investors willing to take the risks, for the potential of higher returns.”

The whitepaper also includes three opinion articles from the sponsors: