International investors in Chinese companies face growing risks

International investors in Chinese companies face growing risks

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Some people are kind of calling this the Chinese Lehman moment.

They don't know which sector might be the next.

China is very much not invited to the party.

It really is a treacherous market.

Here's a big question for 2022. How on earth do you make money from investing in Chinese stocks? 2021 was the point where for global investors putting money to work in China really hit the mainstream. This hit the skids in dramatic fashion.

In August a clampdown on profit-seeking education companies hammered stocks in that sector. Next came video games. Now the big risk comes from property, where developers are crumbling under mountains of debt. Mix in the new variant of Covid, and does investing in China still make sense?

It's a few months now since some of the top global investors said that China was uninvestable. And yet Chinese stock prices have been marching higher over the past 18 months. So some investors are clearly making money. One strategy being employed by domestic investors is to invest along with the Chinese Communist party. But needless to say, this raises some ethical issues for many global investors.

We're almost living in a kind of