Investing in Greater China

Gary Watson is a former lecturer in Chinese studies at Queen’s University and is now a multimedia developer in Mississauga.

There’s no mistaking the fact of China’s role as a player in the
world economy. Since 1978, its gross domestic product has risen
fourfold; in U.S.-dollar terms, China’s economy is the world’s sixth
largest, based on its gross domestic product of around $1.4 trillion. It
has moved rapidly from a non-entity in international trade to the number
three position in world trade—behind the United States and Germany,
and ahead of Japan. Not surprisingly, fund managers view the Greater
China market with keen interest.

Assessing investment opportunities in both China and its ancillary
markets in Hong Kong and Taiwan is the subject of Irene So’s concise
survey. Despite an overly long and sometimes vague introduction to
Chinese history and social philosophy, So’s narrative seldom ventures
beyond the standard definitions and explanations of investment types and
activities covered in general investment guides. Although she offers
useful operational taxonomies of stock and securities markets in China,
Taiwan, Shanghai, and Hong Kong, there is little in the way of
accompanying analysis or case studies to explain to potential investors
both the risks and the rewards associated with the region’s economies.
The lack of footnotes and bibliographical references also makes it
difficult to read more deeply about the social, political, and economic
issues So analyzes.

Although Investing in Greater China succeeds as a basic introduction,
readers contemplating investment in a China fund would do well to expand
both the breadth and the depth of their research beyond So’s
discussion.