The country itself is also seeing major changes that could help the economy move toward more sustainable and steady economic growth. For instance, Oliver pointed out that GDP services for the first time recently broke above 50% or domestic consumption is finally making a major role in economic growth as compared to yesteryear when China followed a more export-oriented business model. Furthermore, consumer price inflation shows a stable reading of 2% to 3%, unemployment stands at around 4% and Deutsche expects fiscal deficit to shrink to 3.2% in 2018 from 3.4% this year.
“It seems like China has plenty of ammunition to weather any future economic storms,” Bush said.
China A-shares may also help better diversify an equity investment portfolio as the Chinese domestic markets exhibit low correlation to U.S. equities.
“Despite having a considerably higher volatility, the low correlation of Chinese and American stocks resulted in a portfolio with higher return and lower risk. In our opinion, this evidence alone makes China a very compelling market to consider,” Bush added.
Investors who are interested in domestic China A-shares can access Chinese markets directly through options like the VanEck Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: CNXT), VanEck Vectors ChinaAMC CSI 300 ETF (NYSEArca: PEK), iShares MSCI China A ETF (BATS: CNYA) and db X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR).
PEK tracks the CSI 300 Index, which includes the 300 largest and most liquid stocks in the China A-shares market. CNXT includes the 100 largest China A-shares stocks listed on the Small and Medium Enterprise Board and the ChiNext Board of the Shenzhen Stock Exchange. CNYA tracks an MSCI index composed of Chinese equities listed on the Shanghai and Shenzhen Stock Exchanges. ASHR also tracks A-shares taken from the CSI 300 Index.