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Steering clear of uncle Xi and his uncle Lee (Li?) in HK. No more civil rights, nor human rights either in the mainland or HK. Dunno about Macau. I visited there, too. It's got history, yes. But these days it's a gigantic casino resort place. And there's a new bridge to Macau from Hong Kong. No need to rely only on the water ferry. That gov't can't be trusted.
Xi is reining in control on private sector now that he consolidated power after their election. Watch out. Alibaba lost 14% this morning. China represents over 33% of VWO.
Andrew Foster of Seafarer funds asked once, is China investable?
No way I will even consider a Chinese company, now. HK is at risk, too. It's a crying shame. On the other hand, TSM looks to be a bargain today. Down by half since 2/21. Yield = 3%. And P/E = 13.46. OOPS! WSJ must have updated more accurate numbers: P/E = 10.37. https://www.stockrover.com/research/insight/analysts/quotes/TSM
Many people assumed investors in China would do well when Chinese economic growth was high. Unfortunately, this did not occur. Now that Chinese economic growth has slowed and President Xi has consolidated power, why should foreigners invest in China?
"China’s economy, on the other hand, grew over three times faster than the American economy on an annualized basis between 2009 and 2019, more than doubling in size in just a decade. Its equity market, the world’s second largest, also grew in size by 138%, almost the same amount as the U.S. stock market. Investors who bet on rising Chinese stocks over the same period, hoping to harness the country’s remarkable growth were, however, bitterly disappointed. In fact, the average investor owning the broad Chinese market through a fund tracking a passive, total market benchmark would have earned returns of 1.6% per year, failing to keep up with the country’s rate of inflation. We refer to this phenomenon as the ‘Chinese Equity Market Paradox.’"
"What explains this dichotomy between China’s remarkable economic growth and such paltry stock market returns? The simple answer: the degree to which the benchmark they follow is composed of—and often overweight—State Owned Enterprises (SOEs). While SOEs abound in emerging markets generally, nowhere else in the world are they so prevalent as in China, largely as a result of the country’s unique privatization program in the early 1990s, as documented in our recently published paper on the subject."
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Andrew Foster of Seafarer funds asked once, is China investable?
OOPS! WSJ must have updated more accurate numbers: P/E = 10.37.
https://www.stockrover.com/research/insight/analysts/quotes/TSM
Now that Chinese economic growth has slowed and President Xi has consolidated power,
why should foreigners invest in China?
"China’s economy, on the other hand, grew over three times faster than the American economy on an annualized basis between 2009 and 2019, more than doubling in size in just a decade. Its equity market, the world’s second largest, also grew in size by 138%, almost the same amount as the U.S. stock market. Investors who bet on rising Chinese stocks over the same period, hoping to harness the country’s remarkable growth were, however, bitterly disappointed. In fact, the average investor owning the broad Chinese market through a fund tracking a passive, total market benchmark would have earned returns of 1.6% per year, failing to keep up with the country’s rate of inflation.
We refer to this phenomenon as the ‘Chinese Equity Market Paradox.’"
"What explains this dichotomy between China’s remarkable economic growth and such paltry stock market returns? The simple answer: the degree to which the benchmark they follow is composed of—and often overweight—State Owned Enterprises (SOEs). While SOEs abound in emerging markets generally, nowhere else in the world are they so prevalent as in China, largely as a result of the country’s unique privatization program in the early 1990s, as documented in our recently published paper on the subject."
Link
China is far from out of the wood. Wuhan is having another COVID outbreak. China lacks effective vaccines and implementation program that will continue to impact their economic growth. This draconian zero-tolerance policy does not work for industrial countries.
https://theguardian.com/world/2022/oct/27/china-locks-down-part-of-wuhan-nearly-three-years-after-first-covid-case-emerged
Several months ago, China wants to buy Moderna’s vaccine but also want Moderna to reveal their trade secret within their patents. And Moderna said “NO”. Moderna already has many orders for boosters from many part of the world.
https://reuters.com/business/healthcare-pharmaceuticals/moderna-refused-china-request-reveal-vaccine-technology-ft-2022-10-02/