China’s shift from a low-income agrarian economy to a market-based system in 1978 reshaped the country as a whole. The once low-income economy was a threat to China so changes had to be made to be competitive both in the domestic and foreign markets. That was made possible after a series of measures that transformed the country roughly five years ago.
The statistics behind China’s economic rise speak for themselves. According to statistics from the World Bank, nearly 800 million Chinese citizens have escaped poverty in the last four decades, and China is the world’s largest exporter of manufactured goods. According to Forbes, China has nine of the biggest firms from the list of the top 20 in the world.
With so much potential for business and investment, China is a really great place to stake your claims, even if you are a foreigner.
So with all that said, let’s find out the best investment opportunities in China.
The Stock Market
The Chinese stock market has had a very rough year, the roughest since 2008. The Shanghai Composite is down by 25% and the Shenzen exchange sees a 33% decline in its benchmark index. According to Gentlemen Marketing Agency, a country’s stock market is often the barometer for the nation’s economic strength and wealth.
So, the Chinese stock market is in a pretty bad state, but does it mean you should stay away from it? The answer to this question is no. The stock market is in a crash due to the US-China stock war that is currently going on. But every investor will happily say that if the market is in decline, then the stock prices are also in decline. If the stock prices are in decline, then there is a real opportunity to invest in Chinese stocks.
The Chinese Yuan
The Chinese are slowly, but with somewhat poor success, trying to make the yuan a global currency. Since December 2017, only 1.7% of both domestic and foreign payments were made denominated in yuan. The numbers show us a low volume, but the future could see those numbers rise. While the trade is not very high, the currency does display positive signs that the volatility in the forex market will increase.
Gold has been a much-favored investment tool in China for almost millennia. The reasons behind it? Gold investments have the potential of stabilizing your investment portfolio and even provide you with an extremely high return of investment during difficult times of the world economy. When the global crisis occurred in 2008, the price for gold was $1,000 an ounce. Everyone started turning towards the shiny material and the price quickly rose to $2,031 per ounce in 2011. That was a 100% increase in the following three years. The next seven years showed us a different picture. The price of gold during the next seven years was in constant decline and at the beginning of 2018, it hit a price of $1,280 per ounce.
However, it’s 2019 and reputable banks such as JP Morgan and the Bank of America think that the price of gold could increase by 15% in the following few years.