Is China Still Investible? Should You Consider Investing In China?

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Is China investible?

If you are investing for the short term: no

Med term: Maybe

Long term: yes.

Let’s explain.

Why is China not investible in the short run?

If you are thinking of investing for a few months up or a few years, I don’t think you should consider investing in China as the market itself is

1. Highly volatile and unpredictable as we’ve seen from the slew of regulatory crackdowns and covid lockdown

2. Not perceived favourably in the global investing community which causes the market to often over-react to negative news while being non-responsive to positive news

3. Currently undergoing a series of changes as the government resets their priorities on social equality which is beneficial in the long run but painful to businesses in the short run

As a result, the Chinese market is the worst nightmare for any short-term investor as they are subjected to higher investment risk while not being rewarded for any positive short-term developments.

To make matters worse, given that China is undergoing a series of changes and the government’s track record of often being too extreme with their implementation, the level of uncertainties that short-term investors have to deal with is not worth it as there are better options available.

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