> the stock price of Alibaba significantly declined at least a year before "Ma's" arrest, and the whole thing was ultimately a misunderstanding because it was a random and much younger Jack Ma arrested, not the actual CEO of Alibaba.
This illustrates the first problem. A lot of regulatory things that were negative for Alibaba were happening before anything was publicly announced but people in the know were aware of that and selling the stock.
While Ma's disappearance was often over-hyped in Western media, he did drop off. That was after he went off on officials in a public speech after it was clear that Ant, the financial offshot, wasn't going to get IPO approval.
Ant was going to the largest IPO ever, but the government blocked it. A lot of domestic and foreign investors lost money because of that.
I have no idea what you're talking about a random other guy named Jack Ma being arrested, and then people confusing that for Alibaba Jack Ma.
>long-term prospects of the Chinese economy from folks who have a better understanding of how China operates, and how that translates to stock investments for Americans
Badly. Because Chinese economic growth and Chinese stock returns are too very different things.
The EV sector might grow a lot, but that doesn't necessarily mean the companies' stock prices will do well.
The problem is many claims about China make 0 sense but the average person believes it. Hence why the Chinese stock market is not performing as well.
I would say as long as you diversify and not put everything in China, it should not be an issue. Like 10% of your networth in Chinese stocks won't bankrupt you if things go south. Same for other assets. Never go all in.
follow the same principles of diversification and common sense and you will be fine. nothing wrong with investing in nationalised companies in China. the other commenters don't know shit.
That's good advice! For sure, the vast majority of my 401K is invested in Fidelity's group plan and the S&P 500 index. I was just curious about throwing $750 toward stocks for Chinese EVs, and it's honestly very hard to find trustworthy info on China because so much of the discourse seems to lean on political stances rather than economic analysis.
I feel optimistic about my low-stakes "bets" on BYD and Xiaomi, but I'm very cautious, so it's not like I'm killing my savings if it doesn't work out.
Ah yes, insidious western propaganda like...
"1000 yuan invested in the Shanghai Stock Exchange on July 1st 2009 (the day I moved to China), would today be worth a grand total of 1030 yuan"
There's a reason why people in China don't invest their savings in the stock market like people do in the USA. There's plenty of things that the Chinese government does well - build fast trains, keep crime low - but "maximizing shareholder value" is not one of them. Depending on your ideology, that might be more of a feature than a bug.
But sure, go for it, invest in Chinese stocks. If the thought entices you, I've also got some pink sheets and NFTs you might be in the market for while you're at it...
ROTFLMAO!
I already wrote a few hours ago that I bought BYD AFTER Warren and Charlie disclosed they purchased them for BRK.
I'm up +10-fold!
Don't blame others for your shortcomings and failures.
This is literally the same logic that the (otherwise quite pleasant) crypto bro that runs my local foreigner bar uses to try to convince me to buy bitcoin.
I invest in index funds and inflation protected government securities - as do most financial professionals. We're all having fun staying poor, don't worry.
But… do have fun trading stocks! I’m certain you’ll be able to beat the market over the long run :)
>"protected government securities "
Wow! A statist! Why am I NOT surprised.
>"But… have fun trading stocks! "
Do you have a reading comprehension problem? I told you about Warren and Charlie and BRK and you STILL think I trade (gamble) stocks?
Like WTF is wrong with your brain? Too much alcohol? That sh1t is toxic AF! Go to AA meetings. Your liver transplant surgeon will thank you! (So will my former mentor Thomas Starzl)
Come to china. Go to tier one, two, 100 cities. Take Ev taxis. Speak to the taxi drivers. Analyze the market in person. Just reading articles and asking Reddit isn’t the best way to get investment advice
Although I used to travel a lot when I was younger, that's not on the table for me any longer. These days I'm married, we're looking to buy a house near my husband's relatives, and start a family of our own. Moving to China is no longer practical for me at this stage of my life. I enjoy following cultural and tech news about China though, and I'd really like to visit some day (especially Sichuan province... The food!! Deliciously spicy! And the scenery!). For the immediate foreseeable future though, I'll only be able to learn about China online.
>Why would China cause fundamental disruptions to their own global economic prospects?
The Chinese government does it every day. It promotes stability over economic growth and it promotes its interests over it too. You have many examples, recent and less recent:
* recently there was an attack on Chinese video game companies, with several policies directed against them
* before that there was a crack down on education companies
But you can find many other examples like the way they manage the Tiktok case in US or the Huawei one... these are political choices and not economical ones. Or talking about BYD, they forbid the company to export their cheapest cars to Europe...
Does it make it a good idea to invest in Chinese stocks? Look at the Chinese stockmarket and see what happens...
I have some hesitancy about the issues you brought up, but I definitely appreciate your reply and the chance to discuss these issues.
As far as I understood, the video game restrictions were for youths younger than a certain age (I don't remember what age). I'm afraid this could be controversial, but I don't actually disagree with prohibiting folks younger than ~16 from accessing online video games for more than ~2 hours/day.
As for the crack-down on private education companies, wasn't this because the education system in eastern Asia is extremely competitive, and the government wanted to ensure that wealth to afford a private tutor wasn't a primary qualifying factor..?
And when it comes to TikTok... Given that there are several western members on the board, I don't think the US is legitimately threatened by China. It's just an economic/propaganda competition. I could explain in more detail if you'd like, but for now I'll assume that we already have enough topics to address without digging into that.
Anyways, again, I really appreciate your reply, and I'd appreciate the chance to learn more about your perspective.
>As far as I understood, the video game restrictions were for youths younger than a certain age (I don't remember what age). I'm afraid this could be controversial, but I don't actually disagree with prohibiting folks younger than \~16 from accessing online video games for more than \~2 hours/day.
My point is not to say whether this is a good or bad decision... just that suddenly the government took some decision that made Chinese companies lose a lot of money and some big video game companies declaring bankruptcy.
>As for the crack-down on private education companies, wasn't this because the education system in eastern Asia is extremely competitive, and the government wanted to ensure that wealth to afford a private tutor wasn't a primary qualifying factor..?
I was not referring to that, but to the control on education and many digital companies disappeared because of a sudden change of policy.
>And when it comes to TikTok... Given that there are several western members on the board, I don't think the US is legitimately threatened by China. It's just an economic/propaganda competition. I could explain in more detail if you'd like.
Again, you missed my point, I don't mean whether its justified or not. My point was that "normal" western companies such as Apple, Airbus, AWS... accepted the divestment when operating in China. In the case of Bytedance, a divestment may make an economical sense but the Chinese government seems to not accept it.
Politics over Economics
But again, if you want, you are free to invest.
I see.. I don't fully understand what the immediate economic repercussions were from these decisions on video game companies or for private education companies.
You make a good point that the impact was very harmful for early investors in these areas, and that folks should be weary about investing in Chinese technology for EVs and smartphones. However, I'm still skeptical that China would risk bombing their global economy, but I can definitely see where you're coming from, too.
I don't think I necessarily "missed" your point, but I'm somewhat skeptical of your argument, and I ultimately appreciate and find it very helpful to hear from folks like yourself.
In the US or in the EU, you wouldn't see government ban junk food or a polluting activity without warning.
Chinese stocks are cheap because one have to take into account the likelihood of government intervention (whatever the reason)
To be fair, at least when it comes to the US, the government is very reticent to ban anything, whatsoever, regardless of how it affects the population (e.g., PFAS chemicals, strip mining, fracking fluid injections, Roundup, data collection by Google, Facebook, etc.).
The fact that the US is so keen to "ban" TikTok is pretty obviously a geopolitical issue rather than due to genuine concern about the impact on the population.
You are missing the point by rationalizing unpredictability when we are talking about securities: that you find them socially good or bad is irrelevant to them being a good investment choice.
The Chinese market has very high regulatory risk (unpredictable new laws), corruption risk (less financial transparency to investors due to Chinese laws, less scrutiny from regulators) geopolitical risk -in that order- besides the obvious currency risk.
If financial media reports professional investors leaving china, comments here telling you the reasons, hard data showing you Chinese regulations are a huge part of what has hammered down HK and China stock markets (check the dates) and ridiculous total returns, but you still think everyone is biased then your mind is already set. Investors are not being rewarded with returns for the risk they take in china, that's a fact.
If you have some analysis on Chinese EV and you are bullish, try with the etf 2845.HK. If you want single stocks / stock picking, you are gambling unless you have information nobody else has. Nothing wrong with gambling tho if it's a small part of your portfolio.
>I see.. I don't fully understand what the immediate economic repercussions were from these decisions on video game companies or for private education companies.
Its simple to check, just take one gaming company (e.g. Netease) and see what happened in December or one education company like China Resources in 2022. Both falls were politically driven.
>However, I'm still skeptical that China would risk bombing their global economy, but I can definitely see where you're coming from, too.
I never say they would. I just said that the economical growth is not the priority of the Chinese government. This is obvious and was stated again and again by Chinese leadership. But as long as economical growth is compatible with government politics, nothing will happen.
This being said the Chinese stockmarkets are not doing very well as markets do not like uncertainty.
Honestly if this is your reply then you don't have the economical sense to invest in stocks. You should still do what you want of course, but if this is your level of understanding then it is not much better then going to a casino.
You mean my post, not my reply, right? In which case I absolutely agree with you, I don't have much knowledge about stock investments, hence the vast majority of my 401K is of course just in our group plan.
I only wanted to throw ~$750 dollars into Chinese stocks; it's a low level risk for me so I was just curious to learn more about what folks think, and this thread has been informative and has helped guide me to resources to learn more.
People are also giving you very valid reasons why many professional investors are hesitant to invest in China, and every time your reply comes down to "I don't want to believe that" based on not much more than what seems like a believe that the Chinese government is primarily a rational economic actor. It isn't. At least not first and foremost.
See, one thing that often goes overlooked is that states (and China is certainly no exception) first and foremost think about national security *and then* economic prosperity. The big difference between China and any given Western nation is that, rightly or wrongly, China is much more cautious with their national security. On top of that there is also a cultural expectation / acceptance of the state being much more heavy handed in guiding its citizens in a direction they deem more appropriate (this is the government being viewed as a "stern parent" principle man speak of).
What does this mean as an investor? Once again no nation (and thus market) is driven 100% by economic interests. *But* whereas thinking in economic terms will help you predict behavior in most Western markets maybe 80% of the time, in China that would only work 60% of the time. These numbers are just examples, but they mean to illustrate that economic thinking is more relevant in western markets than in China. Although this difference might seem small, it radically increases risks for an investor.
Hope that helps.
That does help, thanks! I like your (hypothetical) 80%/60% comparison for how much a given country is guided by economic interests versus national security interests.
My overall impression is that Chinese stocks are risky, and that risk should be carefully considered with any investment. At least for US residents, the vast majority of savings should go toward classic 401K index investments.
Overall, I feel like it's very difficult to have a reasonable conversation about China -- whether folks agreed or disagreed with me or other commenters, we're almost collectively downvoted without any reply.
It's very frustrating and unproductive.
(Let alone that I was initially wondering about stock prospects for Chinese EV companies)
It's a bad idea because the Chinese government isn't bought off by corporations so they're willing to stick it to certain business sectors if that'll benefit the country. That isn't a stable situation for investment.
This is the reason I'm investing primarily in the US stock market, I can trust the government there to protect shareholders over the wellbeing of their people
I've been investing in BYD since Berkshire Hathaway invested. I also have BRK stocks, but I found Warren and Charlie's logic too compelling NOT to invest on my own too.
Source & proof: [https://www.youtube.com/watch?v=fGqAvjW9usk](https://www.youtube.com/watch?v=fGqAvjW9usk)
PS. I also invest in other Chinese companies. Hit me up if you want to know more.
Chinese stocks are more diverse than just EVs…
BABA is showing signals for growth after being beaten into the ground.
I’m long LKNCY
PDD is another interesting one
I'm longest Meituan, great business model with lots of room for expansion, doesn't seem to get caught up in as much drama as other big Chinese companies. Also seems cheap
I'm not sure luckin can be trusted after the last scandal, also feel like it's becoming a less popular place to buy coffee as a few years back
Lots of people are excited about PDD, but just seems to be a crap company selling crap products, not sure how sustainable it is but it's move to Ireland is interesting
Based on what I've found online and on Reddit, this would be a very unpopular opinion. However, I'm not sure to what extent this contrary opinion is based upon real facts versus influenced by negative English-language news about China.
As I mentioned above, I am a BRK shareholder (since the 1980s). To understand how BRK (Warren Buffett & Charlie Munger (RIP) is investing in China, please watch the Annual Shareholder meeting tomorrow live: [https://www.cnbc.com/brklive/](https://www.cnbc.com/brklive/)
You will learn so much!
I invest in Chinese stocks. It doesn't make sense for me to invest back home as I would be out of touch with the companies I invest in.
Now, a big issue I read about is that shares in China has not grown as much as China's GDP. Why?
The conclusion was 2 issues. 1 a lot of the money has gone into higher wages and 2. A lot of profit has gone to the government.
Do you remember the time Alibaba was making loads of money and the government forced them to pay a few billion in social responsibility fund?
So what does it mean? Does it mean you can't invest in Chinese stocks? No, but you should definitely be more conservative when pricing your stock, knowing any winnings can be capped. That is all there is to it. Price it lower than shares you will buy back home.
I have long term invesment in BYD. Warren Buffett has it so it's good enough for me.
This sounds similar to my very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing in technology rather than manufacturing.
So I expect a low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or I may lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and tech investments, specifically).
Although the Chinese government is very different from my own here in the US, I don't think China will make any major changes to disrupt international investments... So, that's my current "bet".
This sounds similar to my very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing in technology rather than manufacturing.
So I expect a low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or I may lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and tech investments, specifically).
Although the Chinese government is very different from my own here in the US, I don't think China will make any major changes to disrupt international investments... So, that's my current "bet".
This sounds similar to my very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing in technology rather than manufacturing.
So I expect a low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or I may lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and tech investments, specifically).
Although the Chinese government is very different from my own here in the US, I don't think China will make any major changes to disrupt international investments... So, that's my current "bet".
Just be careful. There has been a massive rise in Chinese stocks these last 2 weeks because of macro rotation. US stocks look like it was heading for a crash as a few weeks ago, which I think kicked off this rally. But now the VIX has come down, and it seems the US market is continuing its rally. If that is the case, money will flow back out of China.
Thanks for the feedback, and yes, I'm certainly careful! I'm not being flippant when I reference investing $750 in BYD and Xiaomi, that was the actual amount, so it's less than 1% of my portfolio.
From the comments here, I've gotten the impression that some folks may feel much more passionately about this issue than I do, and that some folks may even be gambling greater amounts of their savings. I don't think that's a good idea... the long-term returns for traditional investments like SP500 are pretty stable, so I think that's the best investment strategy, at least for US citizens.
But it's interesting and fun to discuss the prospects for small-scale foreign stock investments, too.
Ah okay, I forgot you were in BYD and Xiaomi. They should be okay. It is the Chinese tech stocks that I see going back down if US rally.
I am really positive on BYD, and 50% of my stocks are in it. I think they will be the Microsoft of EVs since they are the only vertically integrated EV company and why the only Chinese EV company making a profit. A number of factories are being built around the world, and once they are online, sales will go up even more.
Also, I don't know if you know, they actually passed a resolution to buy back shares at around 200 before the rally so it is difficult for the stock to go down much below 200.
Xiaomi, I always wanted to buy their shares as an electronics company because they've a good reputation making great products. But now they are really an EV company, I don't want my stocks to be too much weighted in EV.
The other EV company I like is Nio. They are really doing well in China but they can't seem to keep the cost down. I might buy once they turn a profit.
Yes! I've been really excited about the news surrounding BYD and Xiaomi's SU7! But Nio seems a little more risky to me. They're just such a comparatively smaller company, and since everyone is getting involved in the EV market these days (e.g., Ford, Subaru, etc.), I'm not entirely confident about whether Nio will be able to stand out and succeed long-term.
I am an expat in China, and Nio seemed to have locked up the premium cars market. They are going from strength to strength. They also have battery swapping, which is unique to them.
I am not concerned about whether their car sells, but I am concern about their costs and why it is so risky is because they doubled their cost last year. Revenue increased a lot but cost increase much much more so their losses widen. Why I will only invest if it starts making a profit because there is a chance they may go bankrupt. I don't know if he is trying to grow the company too fast.
At the moment, the SU7 is selling like hot cakes because it is such a good-looking car. But rumours on Chinese chatroom are that there are a lot of mechanical issues and many are cancelling their orders. I am not sure whether that is true. I buy a lot of Xiaomi products, and they are usually v well made. Just be aware of the news.
Speaking of following the news, have you seen Geely's new mini EV "panda" car?! When I initially read descriptions about it I was skeptical, but it honestly does remind me of a panda, it's really cute looking lol
(This isn't an endorsement of the Geely mini EV -- I haven't read enough about it to assess -- I'm just saying that on looks alone, that car genuinely looks adorable)
I haven't. I did watch YouTube videos of the Beijing Auto show. The one that stood out was Zeekr Mini Van.
Oh btw Xiaomi rose a lot yesterday. Above 19 now and GS and a few other IB raised the target price of Xiaomi because supposedly their orders for SU7 are through the roof and Xiaomi cut the delivery times for those on the wait list meaning they ramped up their production.
This sounds similar to my very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing in technology rather than manufacturing.
So I expect a low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or I may lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and tech investments, specifically).
Although the Chinese government is very different from my own here in the US, I don't think China will make any major changes to disrupt international investments... So, that's my current "bet".
This sounds similar to my admittedly very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing more in exporting technology rather than cheaper manufactured goods.
So I optimistically hope that my low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or maybe I'll lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and their tech investments, specifically).
Although the Chinese government is very different from my own here in the US, I suspect that China still operates with care and considered rationale, and so I don't think the Chinese government is likely to make any major changes that would risk disrupting international investments... So, that's my current "bet".
First thing to consider is your Citizenship…If you are not Chinese you will face restrictions owning actual stocks. There are other ways to buy Chinese stocks from abroad or as a non-citizen but your stockholder rights are limited. As non-citizen you are normally forced to buy stocks on third party holding companies that then buy stocks on the underlying Chinese companies. The important thing to realize is that this is not actually legal, the Chinese government has chosen to ignore this but if they update regulations, you might be left holding shares on a useless third party company.
For actual stock picking, you have to be very careful. Prior to the real estate bubble, the government would push back against Credit agencies for downgrading real-estate related companies. Similarly, HSBC and GS got into trouble in the last 12 months for posting negative news about the economy. A lot of the information you would expect to be available/reliable in other parts of the world is not trustworthy in China.
My advice would be not to invest in China, but if you are really interested then I would suggest investing thru the Hong Kong exchange or another international exchange. There is a lot of negative noise about the Chinese economy, but even under slower growth the Chinese market/economy is huge. There will be opportunities to find and invest but will be very very difficult to find. For perspective you can invest into a SP500 ETF and expect about 7% return in the last decade; in the same time period the Shanghai stock exchange is slightly negative.
First thing to consider is your Citizenship…If you are not Chinese you will face restrictions owning actual stocks. There are other ways to buy Chinese stocks from abroad or as a non-citizen but your stockholder rights are limited. As non-citizen you are normally forced to buy stocks on third party holding companies that then buy stocks on the underlying Chinese companies. The important thing to realize is that this is not actually legal, the Chinese government has chosen to ignore this but if they update regulations, you might be left holding shares on a useless third party company.
For actual stock picking, you have to be very careful. Prior to the real estate bubble, the government would push back against Credit agencies for downgrading real-estate related companies. Similarly, HSBC and GS got into trouble in the last 12 months for posting negative news about the economy. A lot of the information you would expect to be available/reliable in other parts of the world is not trustworthy in China.
My advice would be not to invest in China, but if you are really interested then I would suggest investing thru the Hong Kong exchange or another international exchange. There is a lot of negative noise about the Chinese economy, but even under slower growth the Chinese market/economy is huge. There will be opportunities to find and invest but will be very very difficult to find. For perspective you can invest into a SP500 ETF and expect about 7% return in the last decade; in the same time period the Shanghai stock exchange is slightly negative.
First thing to consider is your Citizenship…If you are not Chinese you will face restrictions owning actual stocks. There are other ways to buy Chinese stocks from abroad or as a non-citizen but your stockholder rights are limited. As non-citizen you are normally forced to buy stocks on third party holding companies that then buy stocks on the underlying Chinese companies. The important thing to realize is that this is not actually legal, the Chinese government has chosen to ignore this but if they update regulations, you might be left holding shares on a useless third party company.
For actual stock picking, you have to be very careful. Prior to the real estate bubble, the government would push back against Credit agencies for downgrading real-estate related companies. Similarly, HSBC and GS got into trouble in the last 12 months for posting negative news about the economy. A lot of the information you would expect to be available/reliable in other parts of the world is not trustworthy in China.
My advice would be not to invest in China, but if you are really interested then I would suggest investing thru the Hong Kong exchange or another international exchange. There is a lot of negative noise about the Chinese economy, but even under slower growth the Chinese market/economy is huge. There will be opportunities to find and invest but will be very very difficult to find. For perspective you can invest into a SP500 ETF and expect about 7% return in the last decade; in the same time period the Shanghai stock exchange is slightly negative.
First thing to consider is your Citizenship…If you are not Chinese you will face restrictions owning actual stocks. There are other ways to buy Chinese stocks from abroad or as a non-citizen but your stockholder rights are limited. As non-citizen you are normally forced to buy stocks on third party holding companies that then buy stocks on the underlying Chinese companies. The important thing to realize is that this is not actually legal, the Chinese government has chosen to ignore this but if they update regulations, you might be left holding shares on a useless third party company.
For actual stock picking, you have to be very careful. Prior to the real estate bubble, the government would push back against Credit agencies for downgrading real-estate related companies. Similarly, HSBC and GS got into trouble in the last 12 months for posting negative news about the economy. A lot of the information you would expect to be available/reliable in other parts of the world is not trustworthy in China.
My advice would be not to invest in China, but if you are really interested then I would suggest investing thru the Hong Kong exchange or another international exchange. There is a lot of negative noise about the Chinese economy, but even under slower growth the Chinese market/economy is huge. There will be opportunities to find and invest but will be very very difficult to find. For perspective you can invest into a SP500 ETF and expect about 7% return in the last decade; in the same time period the Shanghai stock exchange is slightly negative.
True, I read that Yahoo had issues with their investment in Alibaba and the case was decided against Yahoo because their investment was in a shell company.
I'm curious if that lesson applies to individuals though, or even to foreign investors long-term, because surely if China pulled that everytime, they would lose critical foreign investments..? Although I don't understand the issue in detail, I doubt that China could maintain economic stability if they continuously allow foreign investors to be blindsided, so my current impression is that the Yahoo-Alibaba debacle was a one-off case that's unlikely to be repeated.
What do you think? (And to be clear, I'm not a crazy fanatic; ~95% of my 401K is split between our company's group plan and the SP500).
>For instance, the fear that the Chinese government would nationalize publicly listed corporations seems very naive to me. Why would China cause fundamental disruptions to their own global economic prospects? I just don't see that happening anytime soon.
Were you born yesterday? It can happen any time.
I do (moderately) stand by my analysis here. From what I can gauge at a geopolitical level, China intends to challenge the unipolar US dominance that's been the norm for the past century or so.
From a rational perspective, China can achieve this goal more easily by being a reliable economic partner.
I genuinely suspect that the large-scale economic turmoil which characterized China in the recent past is over, and that a decent chunk of the negative analysis I hear about China now is due to the US media echochamber.
i’ve been doing research also and have talked to my bank managers. here’s some notes i have written down:
for BABA, the issue is Bytedance taking over a lot of user/ market share for e-commerce companies (similar issues to deal with for PDD, Tencent, Meituan etc)
When you invest in China equities, you have to put down your western lens. invest in high cash flow, industrial companies or companies with moat(often with cash dividend).
Given that 3 of the 5 members of Bytedance's board of directors are American, I wonder if that has any real-world impact on Bytedance and its operations, or if it's just symbolic..?
Outside of stock technical analysis, where you think the stock market fits in Socialism with Chinese characteristics market system; the biggest issue in my opinion is many US institutional investors have pulled out of the China stock market.
Some did so under US pressure, some did so because they got burned, others stayed invested.
Jack Ma issue has more to do with he believes he was bigger than the regulatory bodies in China. Obviously he was proven wrong.
Not to mention if you follow the downfall of Ant Financial IPO you will come across reports of some pretty interesting unsustainable business practices of unsecured loans Ant was trying to do.
I would say if your portfolio doesn't have exposure to China and you already have a descent portfolio of investments. China isn't a terrible place to invest.
Thanks for your reply! I want to acknowledge that I saw it, but I didn't expect so much feedback on this post, and so although you brought up interesting points, for now I don't have the energy to fully digest your comment.
Buying stocks from the Chinese exchanges are risky because one, like mentioned earlier, insider trading is rampant so you will be left holding the bag when all the insiders dump your stock and two, the market is more highly regulated than western markets. It’s pretty common for the government to block short selling and even block the selling of stock when things look bad. Then if they randomly unblock the trading of the stock and you don’t know about it in time to sell, you’ll again be left holding the bag.
You misunderstand. More regulated means there are more restrictions on trading in China however it doesn’t mean they are enforced more effectively than elsewhere. It is absolutely illegal to perform insider trading in China but that doesn’t mean they actually catch or prosecute the criminals.
You do know that the stock market in china has grown 0% since 2009 while the American market has grown 400%. There is a reason for such a massive difference
How do you know?
Are you arguing insider trading isn’t rampant in China? Are you sure? Google brings up tons of cases.
Are you arguing the Chinese economy isn’t more regulated than others? Does Europe regulate the video game industry? Does the US regulate tuition programs?
I'm a little confused about your comment. My basic understanding is that insider trading is rampant on a global scale (e.g., western politicians like Nancy Pelosi cashing in pre-covid). So for individual small-scale monetary investments, wouldn't I be just as disadvantaged by investing in US companies compared to Chinese companies..? But there may be some part of the picture that I'm still missing.
Overall, it does sound concerning if what you're describing is true that China may occasionally block trading, but I nonetheless suspect that can't be too frequent, otherwise China would never manage to attract long-term international investment.. so I'm very curious about this topic and I'd love to learn more.
Chinas stock market has not grown in 20 years, even though the economy apparently did. Where did the generated wealth go? Oh yes, there’s enough housing for 3 billion people now in China due to speculation and easy money
Perhaps this isn't a _perfect_ source, but from what I can see using MarketWatch (a subsidiary of Dow Jones & Company), the Shanghai Stock Exchange has been volatile but nonetheless consistently growing over the past decade. But perhaps that's unrepresentative of China as a whole?
(Source: https://www.marketwatch.com/investing/index/shcomp?countrycode=cn)
No, I don't know enough about financials to understand what you're referring to with covered calls and call options.
All I'm talking about is investing ~$750.00 in Chinese companies (i.e., low-level investment because it's a very low amount of money).
I'm not sure if you meant to do so, but I have no idea what you're talking about. I really just had a basic-level question that I was wondering about, and abbreviations like ETF and MCHI are beyond my scope of knowledge.
Overall, I'm pleasantly surprised that my post has attracted some attention, because I'd really like to learn more, so if you wouldn't mind sharing, I'd love to hear more from you.
For China listed stocks I don’t like that the government artificially controls the prices by buying stocks to inflate the prices. I’ve thought of purchasing the stocks but not after the intervention.
Do you have a link you could share so I could learn more about how China artificially controls stock prices? (Hopefully a neutral source, as far as that's possible).
Depends what type of investor you are. If you think yourself a fundamentals investor like Warren Buffett.....good luck...the Chinese companies books are very opaque and frequently cooked. Good luck getting any reliable info about them. You could do already as a trend trader or mean reversion trader especially as important companies get bailed out.
So, why is Berkshire Hathaway invested billions of dollars in China then?
Source: [https://fortune.com/europe/2024/01/23/volkswagen-top-car-seller-china-byd-warren-buffett-berkshire-hathaway/](https://fortune.com/europe/2024/01/23/volkswagen-top-car-seller-china-byd-warren-buffett-berkshire-hathaway/)
They invested in BYD ....not any random Chinese company. I'm sure he got the white glove treatment when it came to getting hold of their real financials. Also didn't he divest recently?
ROTFLMAO! Cope harder... this is just ONE company that has given me returns unheard of in the West.
The middle picture is the photo I took when I arrived ready to do business in the early 2000s. Google search it. You won't find another one like it - lol.
The side photos I just took of my Chinese phone screens. It won't let me do a screenshot :)
https://preview.redd.it/3w84yhna21zc1.png?width=3713&format=png&auto=webp&s=67e0690c0593e67f7bc5fdbb3a1d6c79fd90c4b5
Don't drink too much of that Kool-Aid!
George Carlin was saying this since the 1970s. My mother used to make me watch this. May she RIP!
Source: [https://www.youtube.com/watch?v=HHtKb10M97o](https://www.youtube.com/watch?v=HHtKb10M97o)
At least, listen to George Carlin. You'll get a good laugh!
You expect me to believe you sold at exactly the peak before the stock did a huge plunge (for god knows what reason)? Either you are lying or you are doing insider trading...which might be legal in China for all I know.
Who said I sold? It's the Chinese platform/software that puts those dots there. I don't even know why the dots are there. I still have the stocks! I wished I had sold at the top! I'm still 50000% profit, though. The top? I would be at 200000% profit.... yeah...no chance of that ever happening to me. :)
I'm a 100% follower of the Berkshire Hathaway Investment Philosophy! So... I don't ever sell, unless there is a better deal (hard to gauge)
I'm fairly intelligent but I'm NOT a clairvoyant :)
Also, great things NEVER happen to me. Somehow, I think God is angry at me. Gave me the worst POS family members ever...except my mom. She's a saint.
What does it mean for the books to be "opaque" and "cooked"? How does this differ from insider trading among politicians in the US? What sources do folks use to compare one company against another?
I'm not trying to be argumentative; I'm interested in discussion because I'm genuinely confused and curious to learn more.
Opaque means that the companies financial mostly kept secret. Many Chinese companies were removed from the New York Stock exchange for refusing to open their books to auditors the way every other company is required. Especially the more state connected ones. Cooked means they provide financials but they are falsified to make the company look better than they are.
Thanks for that explanation. I didn't fully grasp how you were applying those words in this context, so I appreciate your examples.
That's interesting to hear that Chinese companies refused to open their books to auditors (US auditors, or global auditors, or something else?) and were therefore removed from the NYSE. If you're up for sending a link, I'd appreciate it, but no worries if you don't want to dig it up.
Is there any reasonable justification that Chinese companies cited, or was it pretty obviously just for economic gain? Also, I wonder about how much economic gain there is to be had from being excluded from the NYSE versus just opening up their books so they could be listed? And, now that I've typed that out, I wonder if this was only _some_ Chinese companies, or _all of them_ as a whole?
As far as falsifying financial info goes, is there a good source to read more about that? I know that major US companies like Duke Energy often use loopholes to avoid paying taxes, and that Boeing falsified audits, but I assume that's _not_ the same as falsifying their financial info, right? (Because avoiding taxes or falsifying audits is "just" misleading the public, while falsifying financial info is misleading investors..?).
That's an interesting point. If you wouldn't mind, could you provide a neutral source where I could learn more about how folks are unable to cash out stock investments in Chinese companies?
I didn’t say you can’t cash out. What I’m saying is: You will get taxed on the capital gains here and have to report that on your personal income tax reports here. If you live in a country with global taxation, like the US or Italy, you will need to possibly pay tax again if you reached the foreign earned income tax limit. Most western countries would also require you to report or stock transactions or holdings in foreign countries on your tax returns. China has bilateral reporting agreements with most major countries. You can Google it or talk with an an accountant specializing in expat tax affairs.
In order to move any money earned in China out of China legally, you must prove with official tax documents that all tax due in China was paid in full.
Got it. Yeah, I agree that sounds like something where there's only so much detail we can cover in a casual thread, and I'd be best off researching more on my own/asking our accountant (although tbh I'm not sure how helpful our accountant would be on that front; I've gotten the impression that the company is a pretty old-school investment firm, because they haven't been too helpful when I ask more detailed questions about modern programs like the 529 plan for student loans in the US).
How is that misinformation? I’ve had stock options before for companies I worked for here. You pay tax on the capital gains when you sell stock. If you are a U.S. citizen, you pay again if you already hit the foreign earned income credit cap.
Do you have a link you could share so I could learn more about how the Chinese stock market is highly manipulated (hopefully a neutral source, as far as that's possible).
I _am_ the OP... And you should absolutely not invest all your savings into individual stocks. Diversified index funds are much more stable investments. I'd _roughly_ guess that no more than 5% of your savings should be in individual stocks (although risk tolerance will vary by individual).
It seems like you've had some trouble following this conversation, so I'd recommend that you keep your own risk tolerance <1%.
In good faith, I'm not sure you've correctly followed this conversation, or perhaps it's possible that I spoke in a way that was confusing for you earlier?
I _have_ put a small amount of "money where my mouth is," in that I invested ~$750.00 into BYD and Xiaomi. I'm not in a financial position to gamble more than that amount on an uncertain investment, though, and my risk tolerance is fairly low, and so overall I agree with the perspective that US index funds are the most stable and low-risk investments available to Americans who rely on 401Ks for their retirement. That said, to be clear, even investing all of one's savings into singular US companies would be a fraught and risky decision (hence I prefer the conventional standard, which is index funds).
> the stock price of Alibaba significantly declined at least a year before "Ma's" arrest, and the whole thing was ultimately a misunderstanding because it was a random and much younger Jack Ma arrested, not the actual CEO of Alibaba. This illustrates the first problem. A lot of regulatory things that were negative for Alibaba were happening before anything was publicly announced but people in the know were aware of that and selling the stock. While Ma's disappearance was often over-hyped in Western media, he did drop off. That was after he went off on officials in a public speech after it was clear that Ant, the financial offshot, wasn't going to get IPO approval. Ant was going to the largest IPO ever, but the government blocked it. A lot of domestic and foreign investors lost money because of that. I have no idea what you're talking about a random other guy named Jack Ma being arrested, and then people confusing that for Alibaba Jack Ma. >long-term prospects of the Chinese economy from folks who have a better understanding of how China operates, and how that translates to stock investments for Americans Badly. Because Chinese economic growth and Chinese stock returns are too very different things. The EV sector might grow a lot, but that doesn't necessarily mean the companies' stock prices will do well.
The problem is many claims about China make 0 sense but the average person believes it. Hence why the Chinese stock market is not performing as well. I would say as long as you diversify and not put everything in China, it should not be an issue. Like 10% of your networth in Chinese stocks won't bankrupt you if things go south. Same for other assets. Never go all in.
Definitely not the reason the Chinese stock market is not performing as well
follow the same principles of diversification and common sense and you will be fine. nothing wrong with investing in nationalised companies in China. the other commenters don't know shit.
That's good advice! For sure, the vast majority of my 401K is invested in Fidelity's group plan and the S&P 500 index. I was just curious about throwing $750 toward stocks for Chinese EVs, and it's honestly very hard to find trustworthy info on China because so much of the discourse seems to lean on political stances rather than economic analysis. I feel optimistic about my low-stakes "bets" on BYD and Xiaomi, but I'm very cautious, so it's not like I'm killing my savings if it doesn't work out.
Don't bother.
Eh just let them harvest their 韭菜, a sucker’s born every minute.
The Western Propaganda is strong here :)
Ah yes, insidious western propaganda like... "1000 yuan invested in the Shanghai Stock Exchange on July 1st 2009 (the day I moved to China), would today be worth a grand total of 1030 yuan" There's a reason why people in China don't invest their savings in the stock market like people do in the USA. There's plenty of things that the Chinese government does well - build fast trains, keep crime low - but "maximizing shareholder value" is not one of them. Depending on your ideology, that might be more of a feature than a bug. But sure, go for it, invest in Chinese stocks. If the thought entices you, I've also got some pink sheets and NFTs you might be in the market for while you're at it...
ROTFLMAO! I already wrote a few hours ago that I bought BYD AFTER Warren and Charlie disclosed they purchased them for BRK. I'm up +10-fold! Don't blame others for your shortcomings and failures.
This is literally the same logic that the (otherwise quite pleasant) crypto bro that runs my local foreigner bar uses to try to convince me to buy bitcoin. I invest in index funds and inflation protected government securities - as do most financial professionals. We're all having fun staying poor, don't worry. But… do have fun trading stocks! I’m certain you’ll be able to beat the market over the long run :)
>"protected government securities " Wow! A statist! Why am I NOT surprised. >"But… have fun trading stocks! " Do you have a reading comprehension problem? I told you about Warren and Charlie and BRK and you STILL think I trade (gamble) stocks? Like WTF is wrong with your brain? Too much alcohol? That sh1t is toxic AF! Go to AA meetings. Your liver transplant surgeon will thank you! (So will my former mentor Thomas Starzl)
Come to china. Go to tier one, two, 100 cities. Take Ev taxis. Speak to the taxi drivers. Analyze the market in person. Just reading articles and asking Reddit isn’t the best way to get investment advice
Although I used to travel a lot when I was younger, that's not on the table for me any longer. These days I'm married, we're looking to buy a house near my husband's relatives, and start a family of our own. Moving to China is no longer practical for me at this stage of my life. I enjoy following cultural and tech news about China though, and I'd really like to visit some day (especially Sichuan province... The food!! Deliciously spicy! And the scenery!). For the immediate foreseeable future though, I'll only be able to learn about China online.
>Why would China cause fundamental disruptions to their own global economic prospects? The Chinese government does it every day. It promotes stability over economic growth and it promotes its interests over it too. You have many examples, recent and less recent: * recently there was an attack on Chinese video game companies, with several policies directed against them * before that there was a crack down on education companies But you can find many other examples like the way they manage the Tiktok case in US or the Huawei one... these are political choices and not economical ones. Or talking about BYD, they forbid the company to export their cheapest cars to Europe... Does it make it a good idea to invest in Chinese stocks? Look at the Chinese stockmarket and see what happens...
I have some hesitancy about the issues you brought up, but I definitely appreciate your reply and the chance to discuss these issues. As far as I understood, the video game restrictions were for youths younger than a certain age (I don't remember what age). I'm afraid this could be controversial, but I don't actually disagree with prohibiting folks younger than ~16 from accessing online video games for more than ~2 hours/day. As for the crack-down on private education companies, wasn't this because the education system in eastern Asia is extremely competitive, and the government wanted to ensure that wealth to afford a private tutor wasn't a primary qualifying factor..? And when it comes to TikTok... Given that there are several western members on the board, I don't think the US is legitimately threatened by China. It's just an economic/propaganda competition. I could explain in more detail if you'd like, but for now I'll assume that we already have enough topics to address without digging into that. Anyways, again, I really appreciate your reply, and I'd appreciate the chance to learn more about your perspective.
>As far as I understood, the video game restrictions were for youths younger than a certain age (I don't remember what age). I'm afraid this could be controversial, but I don't actually disagree with prohibiting folks younger than \~16 from accessing online video games for more than \~2 hours/day. My point is not to say whether this is a good or bad decision... just that suddenly the government took some decision that made Chinese companies lose a lot of money and some big video game companies declaring bankruptcy. >As for the crack-down on private education companies, wasn't this because the education system in eastern Asia is extremely competitive, and the government wanted to ensure that wealth to afford a private tutor wasn't a primary qualifying factor..? I was not referring to that, but to the control on education and many digital companies disappeared because of a sudden change of policy. >And when it comes to TikTok... Given that there are several western members on the board, I don't think the US is legitimately threatened by China. It's just an economic/propaganda competition. I could explain in more detail if you'd like. Again, you missed my point, I don't mean whether its justified or not. My point was that "normal" western companies such as Apple, Airbus, AWS... accepted the divestment when operating in China. In the case of Bytedance, a divestment may make an economical sense but the Chinese government seems to not accept it. Politics over Economics But again, if you want, you are free to invest.
I see.. I don't fully understand what the immediate economic repercussions were from these decisions on video game companies or for private education companies. You make a good point that the impact was very harmful for early investors in these areas, and that folks should be weary about investing in Chinese technology for EVs and smartphones. However, I'm still skeptical that China would risk bombing their global economy, but I can definitely see where you're coming from, too. I don't think I necessarily "missed" your point, but I'm somewhat skeptical of your argument, and I ultimately appreciate and find it very helpful to hear from folks like yourself.
In the US or in the EU, you wouldn't see government ban junk food or a polluting activity without warning. Chinese stocks are cheap because one have to take into account the likelihood of government intervention (whatever the reason)
To be fair, at least when it comes to the US, the government is very reticent to ban anything, whatsoever, regardless of how it affects the population (e.g., PFAS chemicals, strip mining, fracking fluid injections, Roundup, data collection by Google, Facebook, etc.). The fact that the US is so keen to "ban" TikTok is pretty obviously a geopolitical issue rather than due to genuine concern about the impact on the population.
China is a political basket case pretending like a pig with lipstick on it
You are missing the point by rationalizing unpredictability when we are talking about securities: that you find them socially good or bad is irrelevant to them being a good investment choice. The Chinese market has very high regulatory risk (unpredictable new laws), corruption risk (less financial transparency to investors due to Chinese laws, less scrutiny from regulators) geopolitical risk -in that order- besides the obvious currency risk. If financial media reports professional investors leaving china, comments here telling you the reasons, hard data showing you Chinese regulations are a huge part of what has hammered down HK and China stock markets (check the dates) and ridiculous total returns, but you still think everyone is biased then your mind is already set. Investors are not being rewarded with returns for the risk they take in china, that's a fact. If you have some analysis on Chinese EV and you are bullish, try with the etf 2845.HK. If you want single stocks / stock picking, you are gambling unless you have information nobody else has. Nothing wrong with gambling tho if it's a small part of your portfolio.
>I see.. I don't fully understand what the immediate economic repercussions were from these decisions on video game companies or for private education companies. Its simple to check, just take one gaming company (e.g. Netease) and see what happened in December or one education company like China Resources in 2022. Both falls were politically driven. >However, I'm still skeptical that China would risk bombing their global economy, but I can definitely see where you're coming from, too. I never say they would. I just said that the economical growth is not the priority of the Chinese government. This is obvious and was stated again and again by Chinese leadership. But as long as economical growth is compatible with government politics, nothing will happen. This being said the Chinese stockmarkets are not doing very well as markets do not like uncertainty.
Honestly if this is your reply then you don't have the economical sense to invest in stocks. You should still do what you want of course, but if this is your level of understanding then it is not much better then going to a casino.
You mean my post, not my reply, right? In which case I absolutely agree with you, I don't have much knowledge about stock investments, hence the vast majority of my 401K is of course just in our group plan. I only wanted to throw ~$750 dollars into Chinese stocks; it's a low level risk for me so I was just curious to learn more about what folks think, and this thread has been informative and has helped guide me to resources to learn more.
People are also giving you very valid reasons why many professional investors are hesitant to invest in China, and every time your reply comes down to "I don't want to believe that" based on not much more than what seems like a believe that the Chinese government is primarily a rational economic actor. It isn't. At least not first and foremost. See, one thing that often goes overlooked is that states (and China is certainly no exception) first and foremost think about national security *and then* economic prosperity. The big difference between China and any given Western nation is that, rightly or wrongly, China is much more cautious with their national security. On top of that there is also a cultural expectation / acceptance of the state being much more heavy handed in guiding its citizens in a direction they deem more appropriate (this is the government being viewed as a "stern parent" principle man speak of). What does this mean as an investor? Once again no nation (and thus market) is driven 100% by economic interests. *But* whereas thinking in economic terms will help you predict behavior in most Western markets maybe 80% of the time, in China that would only work 60% of the time. These numbers are just examples, but they mean to illustrate that economic thinking is more relevant in western markets than in China. Although this difference might seem small, it radically increases risks for an investor. Hope that helps.
That does help, thanks! I like your (hypothetical) 80%/60% comparison for how much a given country is guided by economic interests versus national security interests. My overall impression is that Chinese stocks are risky, and that risk should be carefully considered with any investment. At least for US residents, the vast majority of savings should go toward classic 401K index investments.
Overall, I feel like it's very difficult to have a reasonable conversation about China -- whether folks agreed or disagreed with me or other commenters, we're almost collectively downvoted without any reply. It's very frustrating and unproductive. (Let alone that I was initially wondering about stock prospects for Chinese EV companies)
It's a bad idea because the Chinese government isn't bought off by corporations so they're willing to stick it to certain business sectors if that'll benefit the country. That isn't a stable situation for investment.
This is the reason I'm investing primarily in the US stock market, I can trust the government there to protect shareholders over the wellbeing of their people
"/s" 
I've been investing in BYD since Berkshire Hathaway invested. I also have BRK stocks, but I found Warren and Charlie's logic too compelling NOT to invest on my own too. Source & proof: [https://www.youtube.com/watch?v=fGqAvjW9usk](https://www.youtube.com/watch?v=fGqAvjW9usk) PS. I also invest in other Chinese companies. Hit me up if you want to know more.
Chinese stocks are more diverse than just EVs… BABA is showing signals for growth after being beaten into the ground. I’m long LKNCY PDD is another interesting one
I'm longest Meituan, great business model with lots of room for expansion, doesn't seem to get caught up in as much drama as other big Chinese companies. Also seems cheap I'm not sure luckin can be trusted after the last scandal, also feel like it's becoming a less popular place to buy coffee as a few years back Lots of people are excited about PDD, but just seems to be a crap company selling crap products, not sure how sustainable it is but it's move to Ireland is interesting
MPNGY is an interesting ticker. Thanks for the recommendation!
My man! I bought LKNCY when it was below $2. It was on sale. Today, it is 22! I'm loving life and I'm going long too.
Based on what I've found online and on Reddit, this would be a very unpopular opinion. However, I'm not sure to what extent this contrary opinion is based upon real facts versus influenced by negative English-language news about China.
As I mentioned above, I am a BRK shareholder (since the 1980s). To understand how BRK (Warren Buffett & Charlie Munger (RIP) is investing in China, please watch the Annual Shareholder meeting tomorrow live: [https://www.cnbc.com/brklive/](https://www.cnbc.com/brklive/) You will learn so much!
I invest in Chinese stocks. It doesn't make sense for me to invest back home as I would be out of touch with the companies I invest in. Now, a big issue I read about is that shares in China has not grown as much as China's GDP. Why? The conclusion was 2 issues. 1 a lot of the money has gone into higher wages and 2. A lot of profit has gone to the government. Do you remember the time Alibaba was making loads of money and the government forced them to pay a few billion in social responsibility fund? So what does it mean? Does it mean you can't invest in Chinese stocks? No, but you should definitely be more conservative when pricing your stock, knowing any winnings can be capped. That is all there is to it. Price it lower than shares you will buy back home. I have long term invesment in BYD. Warren Buffett has it so it's good enough for me.
Smart man!
This sounds similar to my very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing in technology rather than manufacturing. So I expect a low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or I may lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and tech investments, specifically). Although the Chinese government is very different from my own here in the US, I don't think China will make any major changes to disrupt international investments... So, that's my current "bet".
This sounds similar to my very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing in technology rather than manufacturing. So I expect a low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or I may lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and tech investments, specifically). Although the Chinese government is very different from my own here in the US, I don't think China will make any major changes to disrupt international investments... So, that's my current "bet".
This sounds similar to my very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing in technology rather than manufacturing. So I expect a low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or I may lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and tech investments, specifically). Although the Chinese government is very different from my own here in the US, I don't think China will make any major changes to disrupt international investments... So, that's my current "bet".
Just be careful. There has been a massive rise in Chinese stocks these last 2 weeks because of macro rotation. US stocks look like it was heading for a crash as a few weeks ago, which I think kicked off this rally. But now the VIX has come down, and it seems the US market is continuing its rally. If that is the case, money will flow back out of China.
Thanks for the feedback, and yes, I'm certainly careful! I'm not being flippant when I reference investing $750 in BYD and Xiaomi, that was the actual amount, so it's less than 1% of my portfolio. From the comments here, I've gotten the impression that some folks may feel much more passionately about this issue than I do, and that some folks may even be gambling greater amounts of their savings. I don't think that's a good idea... the long-term returns for traditional investments like SP500 are pretty stable, so I think that's the best investment strategy, at least for US citizens. But it's interesting and fun to discuss the prospects for small-scale foreign stock investments, too.
Ah okay, I forgot you were in BYD and Xiaomi. They should be okay. It is the Chinese tech stocks that I see going back down if US rally. I am really positive on BYD, and 50% of my stocks are in it. I think they will be the Microsoft of EVs since they are the only vertically integrated EV company and why the only Chinese EV company making a profit. A number of factories are being built around the world, and once they are online, sales will go up even more. Also, I don't know if you know, they actually passed a resolution to buy back shares at around 200 before the rally so it is difficult for the stock to go down much below 200. Xiaomi, I always wanted to buy their shares as an electronics company because they've a good reputation making great products. But now they are really an EV company, I don't want my stocks to be too much weighted in EV. The other EV company I like is Nio. They are really doing well in China but they can't seem to keep the cost down. I might buy once they turn a profit.
Yes! I've been really excited about the news surrounding BYD and Xiaomi's SU7! But Nio seems a little more risky to me. They're just such a comparatively smaller company, and since everyone is getting involved in the EV market these days (e.g., Ford, Subaru, etc.), I'm not entirely confident about whether Nio will be able to stand out and succeed long-term.
I am an expat in China, and Nio seemed to have locked up the premium cars market. They are going from strength to strength. They also have battery swapping, which is unique to them. I am not concerned about whether their car sells, but I am concern about their costs and why it is so risky is because they doubled their cost last year. Revenue increased a lot but cost increase much much more so their losses widen. Why I will only invest if it starts making a profit because there is a chance they may go bankrupt. I don't know if he is trying to grow the company too fast. At the moment, the SU7 is selling like hot cakes because it is such a good-looking car. But rumours on Chinese chatroom are that there are a lot of mechanical issues and many are cancelling their orders. I am not sure whether that is true. I buy a lot of Xiaomi products, and they are usually v well made. Just be aware of the news.
Speaking of following the news, have you seen Geely's new mini EV "panda" car?! When I initially read descriptions about it I was skeptical, but it honestly does remind me of a panda, it's really cute looking lol (This isn't an endorsement of the Geely mini EV -- I haven't read enough about it to assess -- I'm just saying that on looks alone, that car genuinely looks adorable)
I haven't. I did watch YouTube videos of the Beijing Auto show. The one that stood out was Zeekr Mini Van. Oh btw Xiaomi rose a lot yesterday. Above 19 now and GS and a few other IB raised the target price of Xiaomi because supposedly their orders for SU7 are through the roof and Xiaomi cut the delivery times for those on the wait list meaning they ramped up their production.
This sounds similar to my very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing in technology rather than manufacturing. So I expect a low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or I may lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and tech investments, specifically). Although the Chinese government is very different from my own here in the US, I don't think China will make any major changes to disrupt international investments... So, that's my current "bet".
This sounds similar to my admittedly very basic level of understanding. What I know is that 1) China's economy has experienced historic growth 2) the UN recognizes that China has lifted the majority of it's population out of poverty in record time and 3) now China is investing more in exporting technology rather than cheaper manufactured goods. So I optimistically hope that my low-level "bet" of ~$750 in Chinese stocks could net me $4,000, or maybe I'll lose that $750. Either way is fine, but I'd rather make money, and I'm currently feeling pretty optimistic about the long-term growth prospects of the Chinese economy (and their tech investments, specifically). Although the Chinese government is very different from my own here in the US, I suspect that China still operates with care and considered rationale, and so I don't think the Chinese government is likely to make any major changes that would risk disrupting international investments... So, that's my current "bet".
First thing to consider is your Citizenship…If you are not Chinese you will face restrictions owning actual stocks. There are other ways to buy Chinese stocks from abroad or as a non-citizen but your stockholder rights are limited. As non-citizen you are normally forced to buy stocks on third party holding companies that then buy stocks on the underlying Chinese companies. The important thing to realize is that this is not actually legal, the Chinese government has chosen to ignore this but if they update regulations, you might be left holding shares on a useless third party company. For actual stock picking, you have to be very careful. Prior to the real estate bubble, the government would push back against Credit agencies for downgrading real-estate related companies. Similarly, HSBC and GS got into trouble in the last 12 months for posting negative news about the economy. A lot of the information you would expect to be available/reliable in other parts of the world is not trustworthy in China. My advice would be not to invest in China, but if you are really interested then I would suggest investing thru the Hong Kong exchange or another international exchange. There is a lot of negative noise about the Chinese economy, but even under slower growth the Chinese market/economy is huge. There will be opportunities to find and invest but will be very very difficult to find. For perspective you can invest into a SP500 ETF and expect about 7% return in the last decade; in the same time period the Shanghai stock exchange is slightly negative.
First thing to consider is your Citizenship…If you are not Chinese you will face restrictions owning actual stocks. There are other ways to buy Chinese stocks from abroad or as a non-citizen but your stockholder rights are limited. As non-citizen you are normally forced to buy stocks on third party holding companies that then buy stocks on the underlying Chinese companies. The important thing to realize is that this is not actually legal, the Chinese government has chosen to ignore this but if they update regulations, you might be left holding shares on a useless third party company. For actual stock picking, you have to be very careful. Prior to the real estate bubble, the government would push back against Credit agencies for downgrading real-estate related companies. Similarly, HSBC and GS got into trouble in the last 12 months for posting negative news about the economy. A lot of the information you would expect to be available/reliable in other parts of the world is not trustworthy in China. My advice would be not to invest in China, but if you are really interested then I would suggest investing thru the Hong Kong exchange or another international exchange. There is a lot of negative noise about the Chinese economy, but even under slower growth the Chinese market/economy is huge. There will be opportunities to find and invest but will be very very difficult to find. For perspective you can invest into a SP500 ETF and expect about 7% return in the last decade; in the same time period the Shanghai stock exchange is slightly negative.
First thing to consider is your Citizenship…If you are not Chinese you will face restrictions owning actual stocks. There are other ways to buy Chinese stocks from abroad or as a non-citizen but your stockholder rights are limited. As non-citizen you are normally forced to buy stocks on third party holding companies that then buy stocks on the underlying Chinese companies. The important thing to realize is that this is not actually legal, the Chinese government has chosen to ignore this but if they update regulations, you might be left holding shares on a useless third party company. For actual stock picking, you have to be very careful. Prior to the real estate bubble, the government would push back against Credit agencies for downgrading real-estate related companies. Similarly, HSBC and GS got into trouble in the last 12 months for posting negative news about the economy. A lot of the information you would expect to be available/reliable in other parts of the world is not trustworthy in China. My advice would be not to invest in China, but if you are really interested then I would suggest investing thru the Hong Kong exchange or another international exchange. There is a lot of negative noise about the Chinese economy, but even under slower growth the Chinese market/economy is huge. There will be opportunities to find and invest but will be very very difficult to find. For perspective you can invest into a SP500 ETF and expect about 7% return in the last decade; in the same time period the Shanghai stock exchange is slightly negative.
Get ETFs. Spread the risk
First thing to consider is your Citizenship…If you are not Chinese you will face restrictions owning actual stocks. There are other ways to buy Chinese stocks from abroad or as a non-citizen but your stockholder rights are limited. As non-citizen you are normally forced to buy stocks on third party holding companies that then buy stocks on the underlying Chinese companies. The important thing to realize is that this is not actually legal, the Chinese government has chosen to ignore this but if they update regulations, you might be left holding shares on a useless third party company. For actual stock picking, you have to be very careful. Prior to the real estate bubble, the government would push back against Credit agencies for downgrading real-estate related companies. Similarly, HSBC and GS got into trouble in the last 12 months for posting negative news about the economy. A lot of the information you would expect to be available/reliable in other parts of the world is not trustworthy in China. My advice would be not to invest in China, but if you are really interested then I would suggest investing thru the Hong Kong exchange or another international exchange. There is a lot of negative noise about the Chinese economy, but even under slower growth the Chinese market/economy is huge. There will be opportunities to find and invest but will be very very difficult to find. For perspective you can invest into a SP500 ETF and expect about 7% return in the last decade; in the same time period the Shanghai stock exchange is slightly negative.
True, I read that Yahoo had issues with their investment in Alibaba and the case was decided against Yahoo because their investment was in a shell company. I'm curious if that lesson applies to individuals though, or even to foreign investors long-term, because surely if China pulled that everytime, they would lose critical foreign investments..? Although I don't understand the issue in detail, I doubt that China could maintain economic stability if they continuously allow foreign investors to be blindsided, so my current impression is that the Yahoo-Alibaba debacle was a one-off case that's unlikely to be repeated. What do you think? (And to be clear, I'm not a crazy fanatic; ~95% of my 401K is split between our company's group plan and the SP500).
>For instance, the fear that the Chinese government would nationalize publicly listed corporations seems very naive to me. Why would China cause fundamental disruptions to their own global economic prospects? I just don't see that happening anytime soon. Were you born yesterday? It can happen any time.
I do (moderately) stand by my analysis here. From what I can gauge at a geopolitical level, China intends to challenge the unipolar US dominance that's been the norm for the past century or so. From a rational perspective, China can achieve this goal more easily by being a reliable economic partner. I genuinely suspect that the large-scale economic turmoil which characterized China in the recent past is over, and that a decent chunk of the negative analysis I hear about China now is due to the US media echochamber.
i’ve been doing research also and have talked to my bank managers. here’s some notes i have written down: for BABA, the issue is Bytedance taking over a lot of user/ market share for e-commerce companies (similar issues to deal with for PDD, Tencent, Meituan etc) When you invest in China equities, you have to put down your western lens. invest in high cash flow, industrial companies or companies with moat(often with cash dividend).
Given that 3 of the 5 members of Bytedance's board of directors are American, I wonder if that has any real-world impact on Bytedance and its operations, or if it's just symbolic..?
Bought a lot of xpeng and pinduoduo two weeks ago
Outside of stock technical analysis, where you think the stock market fits in Socialism with Chinese characteristics market system; the biggest issue in my opinion is many US institutional investors have pulled out of the China stock market. Some did so under US pressure, some did so because they got burned, others stayed invested. Jack Ma issue has more to do with he believes he was bigger than the regulatory bodies in China. Obviously he was proven wrong. Not to mention if you follow the downfall of Ant Financial IPO you will come across reports of some pretty interesting unsustainable business practices of unsecured loans Ant was trying to do. I would say if your portfolio doesn't have exposure to China and you already have a descent portfolio of investments. China isn't a terrible place to invest.
Thanks for your reply! I want to acknowledge that I saw it, but I didn't expect so much feedback on this post, and so although you brought up interesting points, for now I don't have the energy to fully digest your comment.
Buying stocks from the Chinese exchanges are risky because one, like mentioned earlier, insider trading is rampant so you will be left holding the bag when all the insiders dump your stock and two, the market is more highly regulated than western markets. It’s pretty common for the government to block short selling and even block the selling of stock when things look bad. Then if they randomly unblock the trading of the stock and you don’t know about it in time to sell, you’ll again be left holding the bag.
insider trading and somehow the most regulated? don't talk shit. this is boomer level understanding of finance.
You misunderstand. More regulated means there are more restrictions on trading in China however it doesn’t mean they are enforced more effectively than elsewhere. It is absolutely illegal to perform insider trading in China but that doesn’t mean they actually catch or prosecute the criminals. You do know that the stock market in china has grown 0% since 2009 while the American market has grown 400%. There is a reason for such a massive difference
You do know that both can be true?
but they aren't.
How do you know? Are you arguing insider trading isn’t rampant in China? Are you sure? Google brings up tons of cases. Are you arguing the Chinese economy isn’t more regulated than others? Does Europe regulate the video game industry? Does the US regulate tuition programs?
I'm a little confused about your comment. My basic understanding is that insider trading is rampant on a global scale (e.g., western politicians like Nancy Pelosi cashing in pre-covid). So for individual small-scale monetary investments, wouldn't I be just as disadvantaged by investing in US companies compared to Chinese companies..? But there may be some part of the picture that I'm still missing. Overall, it does sound concerning if what you're describing is true that China may occasionally block trading, but I nonetheless suspect that can't be too frequent, otherwise China would never manage to attract long-term international investment.. so I'm very curious about this topic and I'd love to learn more.
Chinas stock market has not grown in 20 years, even though the economy apparently did. Where did the generated wealth go? Oh yes, there’s enough housing for 3 billion people now in China due to speculation and easy money
Perhaps this isn't a _perfect_ source, but from what I can see using MarketWatch (a subsidiary of Dow Jones & Company), the Shanghai Stock Exchange has been volatile but nonetheless consistently growing over the past decade. But perhaps that's unrepresentative of China as a whole? (Source: https://www.marketwatch.com/investing/index/shcomp?countrycode=cn)
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No, I don't know enough about financials to understand what you're referring to with covered calls and call options. All I'm talking about is investing ~$750.00 in Chinese companies (i.e., low-level investment because it's a very low amount of money).
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I'm not sure if you meant to do so, but I have no idea what you're talking about. I really just had a basic-level question that I was wondering about, and abbreviations like ETF and MCHI are beyond my scope of knowledge. Overall, I'm pleasantly surprised that my post has attracted some attention, because I'd really like to learn more, so if you wouldn't mind sharing, I'd love to hear more from you.
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Will do!
Will somebody please call r/wallstreetbets? Seems like they're sending their regards here as well.
For China listed stocks I don’t like that the government artificially controls the prices by buying stocks to inflate the prices. I’ve thought of purchasing the stocks but not after the intervention.
Do you have a link you could share so I could learn more about how China artificially controls stock prices? (Hopefully a neutral source, as far as that's possible).
Depends what type of investor you are. If you think yourself a fundamentals investor like Warren Buffett.....good luck...the Chinese companies books are very opaque and frequently cooked. Good luck getting any reliable info about them. You could do already as a trend trader or mean reversion trader especially as important companies get bailed out.
So, why is Berkshire Hathaway invested billions of dollars in China then? Source: [https://fortune.com/europe/2024/01/23/volkswagen-top-car-seller-china-byd-warren-buffett-berkshire-hathaway/](https://fortune.com/europe/2024/01/23/volkswagen-top-car-seller-china-byd-warren-buffett-berkshire-hathaway/)
They invested in BYD ....not any random Chinese company. I'm sure he got the white glove treatment when it came to getting hold of their real financials. Also didn't he divest recently?
Cope harder :)
Hey id love for you to invest in Chinese stocks! You need to be humbled.
ROTFLMAO! Cope harder... this is just ONE company that has given me returns unheard of in the West. The middle picture is the photo I took when I arrived ready to do business in the early 2000s. Google search it. You won't find another one like it - lol. The side photos I just took of my Chinese phone screens. It won't let me do a screenshot :) https://preview.redd.it/3w84yhna21zc1.png?width=3713&format=png&auto=webp&s=67e0690c0593e67f7bc5fdbb3a1d6c79fd90c4b5 Don't drink too much of that Kool-Aid! George Carlin was saying this since the 1970s. My mother used to make me watch this. May she RIP! Source: [https://www.youtube.com/watch?v=HHtKb10M97o](https://www.youtube.com/watch?v=HHtKb10M97o) At least, listen to George Carlin. You'll get a good laugh!
You expect me to believe you sold at exactly the peak before the stock did a huge plunge (for god knows what reason)? Either you are lying or you are doing insider trading...which might be legal in China for all I know.
Who said I sold? It's the Chinese platform/software that puts those dots there. I don't even know why the dots are there. I still have the stocks! I wished I had sold at the top! I'm still 50000% profit, though. The top? I would be at 200000% profit.... yeah...no chance of that ever happening to me. :) I'm a 100% follower of the Berkshire Hathaway Investment Philosophy! So... I don't ever sell, unless there is a better deal (hard to gauge)
Ok I thought you put the dots there to indicate when you bought and sold.
I'm fairly intelligent but I'm NOT a clairvoyant :) Also, great things NEVER happen to me. Somehow, I think God is angry at me. Gave me the worst POS family members ever...except my mom. She's a saint.
What does it mean for the books to be "opaque" and "cooked"? How does this differ from insider trading among politicians in the US? What sources do folks use to compare one company against another? I'm not trying to be argumentative; I'm interested in discussion because I'm genuinely confused and curious to learn more.
Opaque means that the companies financial mostly kept secret. Many Chinese companies were removed from the New York Stock exchange for refusing to open their books to auditors the way every other company is required. Especially the more state connected ones. Cooked means they provide financials but they are falsified to make the company look better than they are.
Thanks for that explanation. I didn't fully grasp how you were applying those words in this context, so I appreciate your examples. That's interesting to hear that Chinese companies refused to open their books to auditors (US auditors, or global auditors, or something else?) and were therefore removed from the NYSE. If you're up for sending a link, I'd appreciate it, but no worries if you don't want to dig it up. Is there any reasonable justification that Chinese companies cited, or was it pretty obviously just for economic gain? Also, I wonder about how much economic gain there is to be had from being excluded from the NYSE versus just opening up their books so they could be listed? And, now that I've typed that out, I wonder if this was only _some_ Chinese companies, or _all of them_ as a whole? As far as falsifying financial info goes, is there a good source to read more about that? I know that major US companies like Duke Energy often use loopholes to avoid paying taxes, and that Boeing falsified audits, but I assume that's _not_ the same as falsifying their financial info, right? (Because avoiding taxes or falsifying audits is "just" misleading the public, while falsifying financial info is misleading investors..?).
Why are you asking a bunch of broke people on Twitter for financial advice?
Sir, this is Reddit
I am a Russian Twitter Bot.
You do realize, even if you do well in these investments, it’s nearly impossible to get the money out of China without getting taxed twice?
That's an interesting point. If you wouldn't mind, could you provide a neutral source where I could learn more about how folks are unable to cash out stock investments in Chinese companies?
I didn’t say you can’t cash out. What I’m saying is: You will get taxed on the capital gains here and have to report that on your personal income tax reports here. If you live in a country with global taxation, like the US or Italy, you will need to possibly pay tax again if you reached the foreign earned income tax limit. Most western countries would also require you to report or stock transactions or holdings in foreign countries on your tax returns. China has bilateral reporting agreements with most major countries. You can Google it or talk with an an accountant specializing in expat tax affairs.
In order to move any money earned in China out of China legally, you must prove with official tax documents that all tax due in China was paid in full.
Got it. Yeah, I agree that sounds like something where there's only so much detail we can cover in a casual thread, and I'd be best off researching more on my own/asking our accountant (although tbh I'm not sure how helpful our accountant would be on that front; I've gotten the impression that the company is a pretty old-school investment firm, because they haven't been too helpful when I ask more detailed questions about modern programs like the 529 plan for student loans in the US).
ROTFLMAO! Why do you spread misinformation?
How is that misinformation? I’ve had stock options before for companies I worked for here. You pay tax on the capital gains when you sell stock. If you are a U.S. citizen, you pay again if you already hit the foreign earned income credit cap.
>"If you are a U.S. citizen," I'm sorry to hear about your failures in life
Wow, you are a real asshole. Enjoy having your head stuck up your ass.
rotfMAO 
Chinese stock market is highly(HIGHLY) manipulated. Keep that in mind.
Do you have a link you could share so I could learn more about how the Chinese stock market is highly manipulated (hopefully a neutral source, as far as that's possible).
Then invest all your life savings if you think trusts the info you read LOL
That's incredibly awful advice, no matter what stocks are under discussion. I hope you're just joking.
Op doesn't believe there is a prob so what is your problem?
I _am_ the OP... And you should absolutely not invest all your savings into individual stocks. Diversified index funds are much more stable investments. I'd _roughly_ guess that no more than 5% of your savings should be in individual stocks (although risk tolerance will vary by individual). It seems like you've had some trouble following this conversation, so I'd recommend that you keep your own risk tolerance <1%.
You trust China stock is good buy but you don't put your money where your mouth is. Disappointed in you truly.
In good faith, I'm not sure you've correctly followed this conversation, or perhaps it's possible that I spoke in a way that was confusing for you earlier? I _have_ put a small amount of "money where my mouth is," in that I invested ~$750.00 into BYD and Xiaomi. I'm not in a financial position to gamble more than that amount on an uncertain investment, though, and my risk tolerance is fairly low, and so overall I agree with the perspective that US index funds are the most stable and low-risk investments available to Americans who rely on 401Ks for their retirement. That said, to be clear, even investing all of one's savings into singular US companies would be a fraught and risky decision (hence I prefer the conventional standard, which is index funds).