Over the past year, I’ve noticed many Taiwanese investors starting to pay serious attention to Chinese stocks, especially after the joint central bank press conference last September, which completely changed the market sentiment. Since then, the Shanghai Composite Index has rebounded from its lows, with gains approaching 50%, and in October this year, it even broke above 3,950 points, hitting a ten-year high. This rally is definitely worth watching.

First, let’s talk about how to buy Chinese stocks. Taiwanese investors mainly have two options: one is through proxy trading, which brokers like Yuanta, KGI, and Fubon offer, making it a more convenient and familiar channel. The second is opening an overseas brokerage account, with platforms like Futu and Tiger Securities allowing trading in Chinese stocks. When choosing, consider factors like ease of fund deposits, product variety, user experience, and whether Chinese language support is available. Of course, many high-quality Chinese companies are also listed in Hong Kong or the U.S., with Tencent and Alibaba being good options.

So, are Chinese stocks really worth investing in? Here’s my perspective. The government is now explicitly promoting the stock market as a wealth reserve platform, requiring insurance companies and funds to increase their stock allocations. Major international banks like Goldman Sachs and JPMorgan are optimistic about the future trend, predicting that by the end of 2027, the main indices could rise by another 30%. Their reasoning is that corporate profits are improving, and new growth drivers are emerging from AI technology, anti-inflation policies, and overseas expansion strategies.

However, there’s a point to watch out for: recent gains have mainly been driven by valuation expansion rather than fundamental improvements. The MSCI China Index’s P/E ratio has risen from the ten-year average of 11 times to 12.8 times. While still cheaper than U.S. stocks, if macroeconomic recovery falls short of expectations and corporate profits don’t keep pace, the market could face a correction risk.

In terms of sectors, Chinese stocks are dominated by finance and manufacturing. Banks, electronics, and non-bank financials are the largest market cap sectors. If I had to pick individual stocks, a few representative ones stand out: Cambrian (Cambricon) leads in AI chip design with clear technological advantages; CATL is the global leader in power batteries, with the energy transition providing long-term certainty; Hengrui Medicine continues to push forward in pharmaceutical innovation; China Mobile offers stable cash flow and dividends; and Ningbo Bank has a unique regional moat in its operations.

Chinese stocks tend to be typical “short bull, long bear,” with high volatility and being particularly susceptible to policy and liquidity influences. Historically, every time there’s policy stimulus or easing, a bull market tends to emerge, but once policies shift or deleveraging occurs, it ends quickly. Therefore, investing in Chinese stocks requires close attention to monetary policy, liquidity, and policy trends.

Overall, once the issue of how to buy Chinese stocks is addressed, the key is to understand their market characteristics. Currently, valuation has room for recovery, and corporate profits are improving, but risk management is essential—don’t get carried away by short-term gains. If you are optimistic about China’s long-term economic prospects, now might be a good time to allocate.