Is China investible?

India Market ticked over 20k this year and many would say it was acutally a consensus trade.

Geopolitical crisis in recent years has caused havoc. But india seems to have tackled all this heads on.
Flows towards india has been highest in 4 Years Vs Key Emerging Markets. This flow is important variable for india market’s success. But domestic investors have shows strength too.

China on the other hand has faced the brunt of geopolitical pressures and that exact pressure has trickled down domestically too. And i purpose of creating this Valuepickr thread is more towards gaining knowledge and jotting down issues pertaining to China. And just try and figure out the narrative “Is china investable?”. And i would hope to look beyond the consensus narrative.

Let me try and explain the narrative a bit.


1 Year comparison on one of the MF vs the Nifty benchmark


5 Year comparison on one of the MF vs the Nifty benchmark

Comparisons are all good but what are real drivers. Speaking of drivers checking on how china drives to work or in general. I have start with the trouble maker in the pack when it comes to EV. Yes “Chargin infrastructure” China seems to have aced here.

China’s Growing EV charging Network

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This seemed like a good catchup and this did hit home as it does cover in brief a lot of things between china and india

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Chinese gaming always at the front and centre of regulations

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BYD Vs Tesla

Chinese Real Estate Crisis and Extreme Covid lockdowns have hit consumer confidence hard and is yet to recover.

  • Shrinking population: China’s population is shrinking for the first time in decades, leading to a smaller workforce and reduced domestic demand. This long-term trend will put pressure on economic growth potential.
  • High youth unemployment: With a slowing economy and skill mismatch, youth unemployment is a major concern, reaching over 21% in June 2023 before the data was withdrawn. This raises social and economic risks.
  • Geopolitical tensions: Trade disputes with the US and other countries add uncertainty to the economic outlook.
  • Policy uncertainty: Government crackdowns on certain sectors and changes in regulations create anxiety for businesses and investors.
  • Deflationary risks: Falling prices could lead to a vicious cycle of declining demand and investment, further hindering growth.

Could this be the Japanification moment for China?

Disc: Have a small exposure to China via Axis Greater China FoF

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Is Axis Greater China FoF better Vs Edelweiss China FoF ? Any study you did u can share

Not much, Underlying portfolio is somewhat similar. Expense ratio is lower for Axis

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Have been holding Edelweiss greater china for 5 years now and bought a small quantity of axis greater china 1 year ago… day to day volatility of edelweiss is more but seems to capture the upside better… also as per morning star data the underlying JP.morgan china fund is tech heavy…

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BTW… PE of china index is around 10 now

The article is mostly about india but touches chinese growth stall.

I am not a chinese economy expert but i follow polymer prices on weekly basis and all those commentries are similar for following ,
1.China’s labour intensive businesses is moving out, rather it started to move in 2018 and safe to presure they’ve already moved out to SE asia/India.
2.China continues to pour money, into oil to chemical capacity expansion, in a big way despite the suppressed demand, analyst see they intend to move to high value products instead of labour intensive textile,packaging…etc as its labour costs increased.
3.Anaysts see the demand for those chemicals, in western world, to improve in H2 24.

not sure how this is related to the discussion on this thread but if it can help inunderstanding part of chinese macro.

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Both seem to be tech heavy. JPM fund also has stake in TSMC

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It is verry nice talk on China is some one is intrested.

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BYD sells hyrbrid too which is different from Tesla.

Has anyone looked at Mirae Asset Hang Seng TECH ETF?

Interesting, this is even more concentrated on tech. Are inflows currently restricted?

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Could you please tell me what is the total expense ratio of axis Greater China fund including then expense ratio of underlying fund…thanks

Yes, they are not accepting fresh orders for this MF. I am unable to see this fund on Zerodha as well.
Axis is the only good option available considering the expense ratio. Taxation on profits will be as per the slab rate.

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