Chinese equities have begun to rise. While much of the world has been focused on slowing global trade, China quietly delivered a record-breaking trade surplus of over US$1 trillion this year, underscoring the resilience of its export base. Shipments to the US have declined materially, but exporters have successfully redirected goods to markets across Europe, Southeast Asia, Latin America and Africa. This diversification has allowed China’s manufacturing sector to maintain momentum even as geopolitical tensions remain unresolved.
Parallel to that external strength, the domestic regulatory environment has taken a constructive turn. Chinese authorities recently eased investment restrictions for insurance companies, effectively enabling a broader range of institutional capital to flow into domestic equities. Financial firms were quick to respond, with insurers and asset managers boosting equity allocations, particularly into sectors such as banking and healthcare, where valuations and policy alignment are both favourable.
The combination of resilient exports and targeted capital market liberalisation appears to be driving a re-rating in Chinese equities.
Fidelity China Special Situations PLC (LON:FCSS), the UK’s largest China Investment Trust, capitalises on Fidelity’s extensive, locally-based analyst team to find attractive opportunities in a market too big to ignore.
