China’s New Stimulus: Is Now Time to look again at Its Stock Market?

China just introduced a new round of stimulus measures aimed at propping up its slowing economy, which has been hit by sluggish consumer demand, weak property markets, and external pressures like trade tensions. Many has been sceptical about investing in the Chinese stock market, as they still remember the regulatory crackdown beginning in late 2020, when authorities took sweeping actions that reshaped the landscape for some of the country’s largest and most prominent tech companies. Many have spoken on these risks, regulatory uncertainty and governance issues preventing them from investing into the Chinese stock market.

What did I do

Investing in a broad-based dividend index ETF to gain exposure to the Chinese stock market(and emerging markets) is one way to balance growth potential with risk mitigation. This strategy can provide diversification and constant dividend income.

The index is 3110,hk, listed in the HKSE and dividend yield about 7%.. The ETF’s portfolio, comprising around 50 companies across both China and Hong Kong, provides valuable diversification. This spread helps mitigate some of the inherent risks, such as regulatory uncertainty and market volatility, associated with Chinese markets.. This is ok for me, meanwhile, I will just collect dividend and wait for market to realise it's value. This same storyline repeats every time, every crisis is an opportunity if the downside has been carefully managed.

Below is the chart on the breakdown of this ETF.

Despite those risks mentioned in this post, it may be worthwhile taking a look again at the Chinese stock market, especially now that interest rate is coming down, investors are seeking alternative high yield assets to park their money.

This is not a financial advice of any kind.