China: looking beyond the turbulence

Still ample opportunities

Following recent Chinese stock market volatility, GAM Investments’ Wendy Chen argues investing amid a tightening regulatory cycle requires a shift towards policy tailwind sectors.

It has been a turbulent few months for investors in Chinese equities. After its July centennial, the Chinese Communist Party rolled out a raft of regulations. A dive in Chinese names began with an investigation into Didi, following its hasty initial public offering. Panic selling peaked and the Chinese tutoring industry was forced to go non-profit. While many expected stricter regulation in this area, few anticipated a controlled ban through introduction of a not-for-profit model. This ‘black swan' event spread panic across internet, healthcare, and consumer discretionary sectors, as inv...