It’s clear that China’s economic growth hasn’t met the expectations investors had entering last year. Many investors looked forward with excitement towards China’s reopening, not only for its own growth but for rebounding demand boosting the global economy. That hasn’t really materialized, but the Chinese government is taking steps to address the problem. Recent news indicates the country may be easing access to foreign investing, boosting an overall China outlook.
See more: It Could Pay to Be Contrarian With China Stocks
Indeed, per CNBC, Chinese Vice Premier He Lifeng sat down with financial leaders from around the world earlier this week to tout plans aimed at easing foreign investing. That meeting comes as foreign investors have largely hesitated to dive back in amid a disappointing China outlook.
While markets have not yet been totally satisfied by previous signaling around economic support from the Chinese government, unlocking foreign investment would be a serious, material boon to the country’s economy. Perhaps only second to direct fiscal stimulus, with potential monetary action Monday, easing rules around foreign investing could be a major help.
Whichever route the Chinese government takes to improve the economy, an allocation to a China ETF can play a helpful role. For one thing, the U.S. investing environment remains expensive, and faces its own macro challenges. China’s economy may be facing some tough problems in traditional areas like real estate, long term opportunities exist in tech and e-commerce.
An ETF For a Resilient China Outlook
What’s more, a rebound in spending by Chinese consumers, who are still sitting on significant savings from the “Zero COVID” regime, would boost the overall China outlook. Investors can look to strategies like KWEB, the KraneShares CSI China Internet ETF. KWEB tracks an index focused on China internet and software firms, charging 69 basis points (bps) to do so. With the China outlook improving, keep an eye on potential rules changes as one important signal.
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