China may be cheap, but is it cheap enough to make investing there worth it?

China’s crackdown on its markets has spread beyond Big Tech to all sectors of the economy. Investors in China must now ask themselves: is it worth it?

Xi Jinping
Xi Jinping wants to provide a “safe spiritual home” for China's population
(Image credit: © Lintao Zhang/Getty Images)

BlackRock, the world’s biggest asset manager, announced in May that it was very keen on China, which, it told us, had “emerged from the pandemic with renewed confidence”. Its economy and market had both nicely outperformed during the crisis, something that “deepened” BlackRock’s view that it could expect “relatively better returns for Chinese assets over peers”.

It is early days of course. We must never judge an investment call on three months’ performance, but so far this is not going well. Not at all. When I run my eye down a list of my investments, the one that stands out from a long list of pleasant positive numbers is the Fidelity China Special Situations investment trust. It is down 15% in the past three months.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.