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Strong as an Ox? The Chinese economy

Strong as an Ox? The Chinese economy has performed well during the pandemic – here are three potential opportunities for investors

PUBLISHED: 07:35, 12 February 2021 | UPDATED: 08:52, 12 February 2021

Today is Chinese New Year and those celebrating will welcome in the Year of the Ox, which symbolises strength and determination.

These traits wouldn’t go amiss after events of the last 12 months which has seen the coronavirus pandemic engulf the world.

But China, despite being the likely origin of the deadly virus, has been one of the best performing economies over the past 12 months, with the MSCI China index returning 40 per cent.

This compares to an 11 per cent return from the US’s S&P 500, a 2 per cent return from the FTSE World Europe and a 7 per cent loss from the UK’s FTSE All Share…

As expected, China’s economy has also recovered well…

  1. A green opportunity 

Will Hobbs, chief investment officer at Barclays Wealth Management & Investments said Chinese equities are an important part of diversified multi asset class funds and portfolios…

Alastair Campbell, equities investment manager, at Aegon Asset Management said the Chinese government’s environmental agenda is ‘arguably the envy of the world.’

  1. Tech appeal

Meanwhile, China’s technology sector continues to boom, though there are some headwinds investors should be aware of.

Innovation and technological self-sufficiency is likely to be on the agenda, which suggests Beijing will try to speed up the ‘decoupling’ of domestic tech sectors from their international peers, said Greg Kuhnert, co-head of the 4Factor team at Ninety One…

  1. Healthcare and demographics

Demand for healthcare and wellness from a consumer and government standpoint is likely to get a boost thanks to China’s ageing population, which is also becoming wealthier…

What do the experts recommend? 

James Carthew, head of investment trusts at QuotedData, likes Aberdeen New Dawn and Aberdeen Emerging Markets.

Both funds have exposure to domestic China stocks – A shares – through a dedicated fund run by Aberdeen Standard Investments.

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