Global Perspective: Bet on China

The Big Picture

In 2018, China amended its Constitution, laying the groundwork for the next 20 years of development and giving confidence to all who aspire to build great things.

2018 also marked the 40th anniversary of Reform and Opening Up. China solemnly pledged that reform will not stop and the door will open ever wider.

In 2018, the China–US trade war began. The US Democratic and Republican parties and many elites were unusually aligned in seeking to contain China’s rise. Yet we believe: what doesn’t kill us makes us stronger.

In 2018, China hosted the first China International Import Expo, opening its market to the world. The CIIE complements the Belt and Road, strengthening China’s ties with the world.

With 1.4 billion people, China is the largest single market and one of the most dynamic sources of innovation worldwide.

Across smart manufacturing, life sciences, and digital technology, China has progressed from lagging, to catching up, to running alongside, and now leading in many areas.

From the “Two Bombs, One Satellite” era to high-speed rail, large aircraft, mobile payments, and e‑commerce, China can both mobilize for grand national projects and unleash the vitality of private enterprise.

Chinese companies are among the most globalized: you’ll find them in the Shanghai–Shenzhen, Hong Kong, US, Singapore, Japan, and UK stock markets.

To share in China’s growth dividends, keep a global perspective and bet on China—bet on its excellent companies.

Focus on Fundamentals and Financials

Fundamental research

Fundamentals include team, equity structure, R&D capability, product, market space, business model, and profit model.

Team: Talent drives the enterprise. Founders and the management team are the most valuable assets. The character and ethics of core leaders directly shape a company’s future.

Equity structure: A sound structure underpins growth and enables efficient operations.

R&D: The strength of research capability affects sustainability and competitiveness.

Product: Stability, scalability in production, and the ability to keep lowering costs to deliver better value to users.

Market space: Address real societal needs—whether daily necessities or cultural and spiritual needs.

Business model: Asset-light or asset-heavy; product-driven or project-driven. Are supply chain and sales channels stable?

Policy factors: Watch for policy risks and any potential violations of ethics.

Financial indicators

Reading and understanding financial statements is a core skill for investors.

Know the Rules, Bet Carefully

Trading rules

Different markets have markedly different rules.

US and Hong Kong markets have no daily price limits, allow T+0 trading, and permit shorting.

Shanghai–Shenzhen markets cap daily moves, run T+1 settlement, and do not allow shorting, in the name of protecting retail investors.

Markets without price limits tend to digest good news in a single session; investors behave more rationally.

Where limits exist, good news attracts a surge of buyers, and the limit-up mechanism can create a backlog, pushing valuations and P/E ratios higher than in US/EU markets.

Once the limit-up is broken, a pullback is likely.

Be more cautious when trading A‑shares.

Because black-swan events do occur, never go all-in when buying stocks.

Timing

Success in trading depends on doing the work, picking the right targets, choosing the right timing—and favoring longs over shorts.

Timing is price. Even great stocks require patience. Not every moment is a buy. Buying too high can leave you with painful losses.

Published at: Nov 10, 2018 · Modified at: Sep 13, 2025