The 7 Chinese stocks not to be missed

Elizabeth Smith

15 February 2024

While China struggles to restart its economy, some companies of the Asian giant seem projected towards a prosperous and bright future, attracting the attention and interest of investors.

Table of Contents

The Chinese economic picture

The Chinese economy is facing a very delicate period, the country in fact seems to be struggling to recover from the shocks suffered during the pandemic and its growth continues at a slow pace.

Furthermore, inflation is galloping fast, also fueled by the government’s strategy which aims at devaluation of the Chinese currency to encourage international exports.

China’s international position, its tensions with the USA and Taiwan, and its apparent proximity to Russia make everything more complex, partially excluding the country from European markets, with consequent limitation of exports and consequent collapse of production .

Why bet on Chinese stocks

As anticipated, the Chinese economic situation is still particularly unstable, the country is experiencing numerous difficulties which push analysts to remain particularly cautious. Even if recent data ease concerns about the country’s recovery in the post-Covid era.

Experts are waiting for demand to normalize and by looking at export data it is possible to see the first signs of recovery. The one who is convinced of this is Arjun Divecha, founder of GMO Emerging Markets Equity, who in a recent speech declared that the “normalization of demand will happen, and there is evidence that it is starting to happen if you look at car sales”.

BCA Research analysts are of the same opinion, who have highlighted signs of stabilization in the Chinese economy. These signals come above all from the credit sector which in August was growing compared to the previous quarter.

BCA also observed a general increase in consumer prices, an increase of 0.1% compared to the previous year, which appears negligible compared to the increases recorded in Europe, but which, when compared to the 0.3% drop recorded in July , is particularly significant.

Louis Lau, investment director of Brandes Investment Partners, is also optimistic about the investment opportunities offered by Chinese companies. In particular looking with attention and interest at internet stocks, the insurance sector, and sportswear manufacturers.

In short, industry experts agree in observing that the setback of the Chinese economy is only temporary. And that, in the next few years, it could restart at full capacity, thanks also to the efforts of the Beijing government which has focused on Chinese families, ensuring that the country’s economy restarted from internal consumption.

Which Chinese companies to invest in

For most experts, the fastest growing Chinese companies to keep an eye on are stocks related to exports, internet and technology, the insurance sector and clothing products.

Here are some of the best Chinese stocks to invest in: