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How Can I Invest in China?

By Nicholas Rossolillo - Aug 15, 2017 at 1:33PM

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Several Chinese stocks and ETFs are available to U.S. investors. Here's what you need to know about how you can invest in China.

Chinese companies present a potentially huge opportunity for investors, but the market in China carries unique risks and challenges that bear consideration. Here is how to invest in shares of Chinese companies and exchange-traded funds (ETFs) available for trading in the U.S.

Buying individual companies

A woman standing in front of a wall with a drawing of a bag of money inside a thought bubble.

Image source: Getty Images.

Investing in China can be a real trick as companies there carry various share classes that may or may not be accessible to the average investor outside China. For example, A shares are shares of a Chinese company that are only available to investors in mainland China. H shares, on the other hand, are shares of those companies that trade in Hong Kong and are available to anyone -- assuming your broker allows you to trade on the Hong Kong exchange.

The easiest way to invest in Chinese companies, though, is to buy shares that list on an exchange here in the United States. Here is a list of the largest Chinese companies available with market capitalizations over $10 billion:


Market Cap

TTM Price-to-Earnings

What the Company Does


$389 billion


China's largest e-commerce network


$205 billion


An integrated oil and energy company

China Life Insurance 

$106 billion


A life, health, and accident insurance company operating in mainland China

China Petroleum & Chemical 

$94 billion


An integrated oil and energy company


$77 billion


China's largest internet search engine 

$61 billion


A leading Chinese e-commerce platform


$41 billion


A leading online multimedia and services provider

China Telecom 

$36 billion


Wireline and mobile telecom services provider 

$27 billion


Travel and accommodation booking website


$19 billion


A Chinese social network and video gaming platform

Huaneng Power 

$12 billion


A leading utility company

Yum China Holdings 

$14 billion


KFC, Pizza Hut, and Taco Bell in China and the largest restaurant chain

New Oriental Education & Technology 

$13 billion


A private education services provider

China Eastern Airlines

$13 billion


Airline and transportation services

Aluminum Corporation of China 

$12 billion


Chinese manufacturer of aluminum products

China Southern Airlines 

$11 billion


Airline and transportation services

ZTO Express 

$10 billion


Delivery and logistics provider in China

Data sources: Yahoo! Finance. TTM = trailing 12 months.

In addition, some companies, such as China's largest social network owner, Tencent Holdings, are available on over-the-counter markets. In all, some 300 Chinese companies can be traded in some way stateside. The work in filtering through those can be difficult, but an easier option also exists.

Chinese stock ETFs

There are dozens of Chinese ETFs that have popped up over the years, covering everything from debt to specific industries operating in mainland China. If you're looking for broad exposure to the Chinese stock market, though, here is the list you should start with:


Fund Total Net Assets

Expense Ratio

Fund Composition

iShares MSCI China ETF (MCHI -0.80%)

$2.58 billion


The fund holds shares of Chinese companies that are available to all international investors.

PowerShares Golden Dragon China ETF (PGJ -2.04%)

$186 million


The fund is composed of Chinese companies whose shares are listed on a U.S. exchange.

DB X-Trackers Harvest CSI 300 China A-Shares ETF (ASHR -1.45%)

$487 million


The fund holds A shares of the largest 300 Chinese companies that only trade on a Chinese exchange.

Data sources: iShares, PowerShares, and Deutsche Bank.

Takeaways for investors

When investing in Chinese stock ETFs, investors have three basic choices: stocks listed on Chinese stock exchanges, international investor shares, and companies specifically listed on U.S. exchanges. The DB X-Trackers fund, which holds Chinese exchange-listed companies, has had the wildest performance due to the bubble-and-bust China market of 2015. Because of the extra risk involved, owning shares in China's fast-developing and changing mainland economy may not be the best route to take for the faint of heart.

MCHI Chart

Data by YCharts.

Of the two funds that own shares of companies listed outside of the Chinese stock exchanges -- iShares MSCI China ETF and PowerShares Golden Dragon China ETF -- PowerShares Golden Dragon and the companies it owns listed in the U.S. have fared better. Some, but not all, of that has to do with the extra risk with fluctuating foreign currency exchange rates. Listing on major U.S. exchanges has also helped moderate the roller-coaster movements that investing in an emerging economy can present.

For investors who want to bet on the future of the Chinese economy, there are plenty of options. There are more individual companies than ever available for trading for those of you who don't mind the homework, and a myriad of ETFs can help you get broad exposure to the whole market. Whichever option you go with, be prepared for a roller-coaster ride as China's economy continues to modernize.

Nicholas Rossolillo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Baidu. The Motley Fool recommends International, NetEase, New Oriental Education & Technology Group, and Weibo. The Motley Fool has a disclosure policy.

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Stocks Mentioned

DBX ETF Trust - Xtrackers Harvest CSI 300 China A-Shares ETF Stock Quote
DBX ETF Trust - Xtrackers Harvest CSI 300 China A-Shares ETF
$30.79 (-1.45%) $0.45
Invesco Exchange-Traded Fund Trust - Invesco Golden Dragon China ETF Stock Quote
Invesco Exchange-Traded Fund Trust - Invesco Golden Dragon China ETF
$27.92 (-2.04%) $0.58
iShares Trust - iShares MSCI China ETF Stock Quote
iShares Trust - iShares MSCI China ETF
$48.43 (-0.80%) $0.39
PetroChina Company Limited Stock Quote
PetroChina Company Limited
$43.45 (0.61%) $0.27
China Telecom Corporation Limited Stock Quote
China Telecom Corporation Limited
NetEase, Inc. Stock Quote
NetEase, Inc.
$84.40 (-1.99%) $-1.71
Aluminum Corporation of China Limited Stock Quote
Aluminum Corporation of China Limited
$8.78 (0.82%) $0.07
China Petroleum & Chemical Corporation Stock Quote
China Petroleum & Chemical Corporation
$45.96 (-0.13%) $0.06
Baidu, Inc. Stock Quote
Baidu, Inc.
$129.65 (1.03%) $1.32
New Oriental Education & Technology Group Inc. Stock Quote
New Oriental Education & Technology Group Inc.
$23.79 (-3.10%) $0.76 Group Limited Stock Quote Group Limited
$26.02 (0.33%) $0.09
China Southern Airlines Company Limited Stock Quote
China Southern Airlines Company Limited
$26.30 (-2.12%) $0.57
Tencent Holdings Limited Stock Quote
Tencent Holdings Limited
$39.57 (-0.06%) $0.02
Alibaba Group Holding Limited Stock Quote
Alibaba Group Holding Limited
$89.63 (-1.22%) $-1.11, Inc. Stock Quote, Inc.
$54.86 (-0.60%) $0.33
Weibo Corporation Stock Quote
Weibo Corporation
$18.01 (-0.39%) $0.07
China Life Insurance Company Limited Stock Quote
China Life Insurance Company Limited
$7.11 (0.21%) $0.01
Huaneng Power International, Inc. Stock Quote
Huaneng Power International, Inc.
$21.37 (7.12%) $1.42
China Eastern Airlines Corporation Limited Stock Quote
China Eastern Airlines Corporation Limited
$17.67 (-1.62%) $0.29
Yum China Holdings, Inc. Stock Quote
Yum China Holdings, Inc.
$47.18 (0.60%) $0.28
ZTO Express (Cayman) Inc. Stock Quote
ZTO Express (Cayman) Inc.
$26.27 (-1.35%) $0.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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