A New Rationale for Investing in China (Part Two)

The key question to ask yourself is "What If"...

The China market is not necessarily better or worse than the others. It’s just different. The root cause of China’s low correlation with other major markets is an increasingly different blueprint for growth from the West.

Globally, we all face the same set of issues: climate change, economic inequality, geopolitical risk, artificial intelligence etc. China is definitely trying to tackle these issues in its own unique way, which may be different from the Western ideology.

Investing in China today is about what if the almighty West fails to address and solve the world’s problems at hand, and what if China is right with its “unconventional” or sometimes “controversial” approach.

“Paradigm Shift: an important change that happens when the usual way of thinking about or doing something is replaced by a new and different way”. Merriiam-Webster

“The one thing I know for sure about China is, I will never know China. It’s too big, too old, too diverse, too deep. There’s simply not enough time.” Anthony Bourdain

In Part One of this series, we discussed why most of the so-called “no-brainers” for investing in China no longer stand, being:

• Policy (challenges)

• Growth (slowing)

• Entrepreneurship (undermined)

• Consumption (weakening)

Today let’s talk about one reason that makes China still worth investing in:

Low Correlation with Other Markets