Can You Continue To Invest In China?

There was a BIG hype before the Beijing Olympics, major financial news indicating that the share prices of China and the Greater China were to soar higher. To a certain extent it was true. When the global economic slump began, China was one of the worst to be hit. In the below table, you can see the market returns of many countries/region.

Market Returns from 2 January 2008 to 30 September 2008.

Market	Index	Returns
India	SENSEX	-44.9%
China	Hang Seng Mainland Composite	-40.0%
Asia ex-Japan	MSCI Asia ex-Japan	-38.3%
Korea	KOSPI Index	-38.0%
Thailand	SET Index	-36.0%
Emerging Markets	MSCI Emerging Markets	-34.2%
Hong Kong	Hang Seng Index	-32.3%
Indonesia	Jakarta Composite Index	-31.3%
Taiwan	TWSE Index	-29.6%
Malaysia	Kuala Lumpur Composite Index	-29.5%
Europe	DJ Stoxx 600	-29.5%
Singapore	FTSE STI Index	-29.0%
Asian Tech	Bloomberg Asia Pacific Technology	-27.5%
World	MSCI World	-22.5%
Tech	Nasdaq 100	-20.4%
Japan	Nikkei 225	-19.0%
US	S&P 500	-17.3%

Returns are in RM terms

Source: Fundsupermart

Now, the question is : Can You Continue To Invest In China?

According to Fundsupermart's research, '..should be prepared for short-term volatility. China equity funds are single-market funds which may exhibit greater volatility than regional funds in the short term – we suggest investors place China or Greater China equity funds in the supplementary portion of their portfolio, which usually takes up no more than 20% of an overall portfolio.'

Rick Aristotle Munarriz in his article, 7 Reasons to Remember China at The Motley Fool, mentions that '...as long as all seven of these companies keep growing, they will be big market winners in four years.'

'...China has the largest population in the world, and it has had economic growth in the last nine or 10 years of at least 9%, 10% or 11%. If the bubble bursts, maybe the economy grows at 7% a year. That's still greater than other economies in the world...' this should be noted as another strong point why China should be a good place for investment during bad times, as written on Street.com's China: 'The Best Place to Invest in the Next Five to 10 Years'

It will happen eventually, the question is when? So, in order to be on the safer side, never put the money that you would be needing in less than 5 years for investment.