Consumers’ willingness to open their wallets and spend is certainly a sign that the economic effects of the Covid-19 pandemic could be subsiding, and for a little while, China was experiencing just that before online shopping took a dip in August. Is this a sign that the recovery will be a slow and drawn out affair?

“Chinese fervor for online shopping waned in August, a sign that the world’s second-largest economy still faces many challenges as it tries to boost consumption at home,” a CNBC article said. “The Chinese government is trying to develop domestic demand as the primary driver of the country’s growth, rather than relying on exports.”

“The coronavirus pandemic this year has accelerated the growth of online shopping, with its share of overall retail sales rising from about one fifth last year to one quarter this summer. But uncertainty about future income and economic growth are proving to be an overhang,” the report added.

“With unemployment stress and growth headwinds persisting into the fourth quarter, any recovery in overall consumption will be mild,” Imogen Page-Jarrett, research analyst at The Economist Intelligence Unit (EIU), said in an email.

Nonetheless, ETF investors looking to get Chinese equity exposure can consider the Xtrackers MSCI All China Equity ETF (CN). CN seeks investment results that correspond to the performance, before fees and expenses, of the MSCI China All Shares Index, which is designed to capture large- and mid-capitalization representation across all China securities listed in Hong Kong, Shanghai, and Shenzhen.

CN Chart

CN data by YCharts

Here are two more options to consider as China continues its recovery from the Covid-19 pandemic:

  1. Xtrackers CSI 300 China A-Shares ETF (NYSEArca: ASHR): seeks investment results that correspond generally to the performance, before fees and expenses, of the CSI 300 Index. The fund will normally invest at least 80% of its total assets in securities of issuers that comprise the underlying index. The underlying index is designed to reflect the price fluctuation and performance of the China A-Share market and is composed of the 300 largest and most liquid stocks in the China A-Share market. The underlying index includes small-cap, mid-cap, and large-cap stocks.
  2. Xtrackers MSCI China A Inclusion Equity ETF (NYSEArca: ASHX): The investment seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI China A Inclusion Index. The fund will normally invest at least 80% of its total assets in securities (including depositary receipts in respect of such securities) of issuers that comprise the underlying index. The underlying index is designed to track the equity market performance of China A-Shares that are accessible through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect program.

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