The China opportunity

Much is changing in China and this has material implications for all investors, whether individuals or large, sophisticated institutional investors. The cost of ignoring this emerging opportunity might prove too high, especially over the longer term.

China: The Essentials
Learn more in our latest infographic.
Red, Chinese lanterns

Huge, but under-owned

2nd
Largest economy
in the world1
2nd
Largest equity & bond
markets globally2
3%
Owned by foreign
investors3

Sources: 1 World Bank, April 2020, 2Bloomberg, March 2020, 3Wind, March 2020

In China, we have a saying that the journey of 10,000 miles starts with a single step. And onshore China, for many international investors, is a first. I think it's very exciting to embrace that, and all the diversification benefits that onshore China brings, as well as all the growth opportunities that onshore China brings.

Why am I excited about China? Well, just think about the numbers. It's big. One in five people in the world live in China today. The size of the bond market is $13 trillion. That's the second-biggest bond market in the world. And this has evolved so quickly. It only started in the beginning of 2000, just like the equity market. It started with eight companies that were listed at $500 million, and now it's currently $10 trillion, and foreign participation in this market, it's only 3%.

So when I think about the opportunity and what this is going to mean for our global investors, there is going to be a significant change in terms of allocations over the next decade.

Let's also not forget about data, which is really the oxygen for a modern investment process. We really need to look at what kind of data is available in different markets. And China is also a fertile ground for us to look at different kind of data, especially alternative data that can help us to make better investment decisions.

We're finding enormous opportunities in the onshore Chinese equities space. We see this in companies that we meet that really represent the industries of tomorrow, be it precision manufacturing, advanced materials and chemicals, semiconductors and technology, pharmaceuticals, as well as renewable energy. China is now investing at a skill unseen in other parts of Asia and the emerging markets, and it's innovating at a pace that it has never before.

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As onshore equity and fixed income markets open up, investors have the chance to gain exposure to a broader range of companies and take advantage of the exciting opportunities that China offer.

Why BlackRock for China

To help discover the opportunities these changes provide, you need a trusted partner who is not only an expert on China but can apply their knowledge, expertise and judgement in creating portfolios that can deliver the best of Chinese markets to you.

BlackRock’s large and experienced team can provide you with a truly differentiated perspective on China and our breadth of solutions across active and index strategies give you a multitude of ways to access the market.

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