China has long been a global growth engine with favorable long-term fundamentals, economic expansion and rising consumer wealth. It accounted for 32% of global GDP growth in 2018—a greater share of growth than that of the United States, Europe and Japan combined.

China’s growth has many drivers: growing domestic wealth, technological innovation, expanded entrepreneurship, a burgeoning services sector and financial reform, to name a few. As a result, there are more opportunities for global investors to take part in China’s dynamic economy as the country shifts away from exports and manufacturing toward innovation, consumer consumption and services.

Rebalancing of the Chinese Economy Well Underway
Consumer and Services surpassed Manufacturing within the past five years

Sources: CEIC; as of March 31, 2019.

The scale of the opportunity for investors is substantial—and it is growing fast. The liquidity, depth and breadth of listed companies in China is second only to the United States with approximately 5,000 companies, when including those listed on China’s A-Share market. This rapid expansion, supported by China’s government, has undoubtedly created more opportunities but also more complexity for investors.

China’s Expanding Universe
Consumer and Services surpassed Manufacturing within the past five years

Sources: FactSet; data as of June 30, 2019.