With a stimulus-fuelled boom in domestic demand altering the composition of China’s breakneck growth, investors are increasingly looking at fresh angles to buy the dragon.
Gaining exposure to China’s growth story can be a tricky prospect – China’s currency is still largely controlled by the state, its bond market is small and suffers from a weak legal structure, and Chinese equities have been a poor indicator of the country’s economic success.
The Shanghai Composite index remains the second-worst performing major equity market in the world this year, after Greece, despite gross domestic product growth steaming ahead at 11.3 per cent in the first half of 2010.