Realising the investment potential of China firms

CHINA'S investment potential since the opening of its economy has enticed many investors. Its rapid economic rise and the emergence of large industrial and service sectors have created a wide range of investment opportunities and instruments. While the potential returns are attractive, there are challenges and pitfalls to overcome. Two experts and I examine the different ways to invest in Chinese companies.

"China's growth must be seen in the context of its expanding role in the world economy. This means that investors shouldn't only focus on growth numbers. They need to look closely at the characteristics of each company or opportunity within overall trends," says Ayaz Ebrahim, CIO Asia ex-Japan equities and deputy chief executive officer of Amundi Hong Kong.

He adds: "Continuation of economic opening and liberalisation is a key trend allowing the entry and expansion of foreign banks. QFII (Qualified Foreign Institutional Investor), RQFII (Renminbi Qualified Foreign Institutional Investor) and Shanghai-Hong Kong Connect are policy commitments towards a controlled opening of China."