The Chinese market has suffered a fairly dramatic 18 months, which may have convinced many investors to steer clear of the region entirely. China's key benchmark index, the Shanghai Composite, went up by 60% between February and June last year, then dropped sharply in August when the Chinese government devalued the renminbi by 3%.
Now, even though fears over an imminent and significant devaluation have faded, the market has struggled to regain the highs of last year.
But looking beyond the short-term volatility, a shift in China's economic focus should provide long-term growth opportunities for investors. The country has seen rapid development in recent decades, but if it wants that to continue, it realises that it has to look beyond the low-wage, low-cost manufacturing-driven business model, and towards being driven more by internal demand from consumers.
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Quite apart from anything else, with wages rising fast in China, other emerging nations in the region have been competing with China for the "offshoring" dollar for sometime.
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So China is now going through a period of transition from being an investment-led economy to a consumption-led one. Its 13th five-year plan (China's grand strategy for social and economic development initiatives) brought with it the abolition of the one-child policy, but also a focus on social services, such as health care and pensions.
This should help the shift towards consumerism people who are less worried about putting away every penny for their oldage or for when a medical disaster strikes will be more inclined to spend on today's little luxuries. Ongoing urbanisation and the continued rise of the country's service industry should also fuel growth.
Several sectors in particular are already benefiting from the rise in consumerism. China is already the world's biggest car market, and the sale of sport-utility vehicles increased by 46% in March from the same period last year, according to the China Association of Automobile Manufacturers.
The cinema and e-commerce sectors have also seen significant jumps in revenue, with e-commerce company Alibaba seeing annual Chinese revenues grow to 63bn in 2015, up 40% from the year before. International firms continue to expand in the region: PepsiCo opened a Quaker Oat plant on the mainland in October.
There is, of course, another side to this growth story. Demand for smartphones is beginning to slow for some companies, such as Xiaomi (once thought of as China's answer to Apple), and the luxury goods market saw sales drop by 2% year-on-year in 2015 (partly due to an anti-corruption drive).
The large supply of labour that has contributed to recent urbanisation will soon start to retire, meaning that the supply of working-age people will be smaller (not helped by the legacy of the one-child policy). This means wages are likely to continue to rise, which would affect corporate profits.
And there is obviously a chance the government could implement policies that slow this trend. But, ultimately, the move towards increased consumerism looks as though it is here to stay, and now is a good time to consider how to profit from it.
If you're looking to gain exposure to the Chinese market, the Fidelity China Special Situations investment trust (LSE: FCSS) is up 25% over the past five years. The trust is rated five-star by research company Morningstar and counts communications conglomerate Tencent Holdings and Alibaba among its top ten holdings. It's trading at a 16% discount to net asset value, wider than the typical 9% over the last five years.
