Access to the Chinese stock market is getting much easier, and for investors, the timing could not be better, because the market is delivering strong returns, the Associated Press reports.
According to Lipper, the 22 China region funds have churned out returns of 16.52% this year and 29.05% over two years. The gains mirror that of the countrys economy, which is growing at a pace of at least 8% per year.
Philip Ehrmann, who heads up Pacific and emerging markets for London-based Gartmore Funds, said the countrys economic sectors are beginning to open up. "As time has gone by, whole new companies exploiting opportunities are becoming available to investors not only in China but to foreign investors as well," Ehrmann said.
However, even as the country shores up manufacturing and considers loosening its tight money control laws, there is still significant risk in investing in China. After all, history indicates that the Communist country is not immune to political unrest and quick economic downturns. Those trying to avert those risks have much of their money in Taiwan and Honk Kong, rather than mainland China itself.
Ehrmann admitted that it is only natural for investors to be concerned about the politics of China, but maybe not as much as in the past. "Of course, many investors will question China's rights record, and rightfully so. But the chance for political upheaval, in our view, remains slim," he said.