Content

• Steps
• Tips
• Warnings
• What do you need

There are several ways to invest in Chinese stocks. To make the right investment decision, you need to know what shares are available to foreign investors, on which stock exchanges these shares are traded, for what currency they are sold.

Steps

1. 1 B-shares. These are stocks traded on the Shanghai and Shenzhen Stock Exchanges.
   • Investors can buy B-shares with foreign currency. B shares are denominated in US dollars on the Shanghai Stock Exchange and Hong Kong dollars on the Shenzhen Stock Exchange.
2. 2 X-shares. These are stocks traded on the Hong Kong Stock Exchange.
   • Like the B-shares on the Shenzhen Stock Exchange, the X-shares are also traded in Hong Kong dollars.
   • Chinese stocks traded on international stock exchanges are ADRs of X shares.
3. 3 A-shares. These are stocks traded on two mainland Chinese exchanges in yuan.
   • A shares are only sold to mainland Chinese citizens and some foreign investors.
   • Foreign investors can only buy A-shares through the Qualified Foreign Institutional Investor (QFII) program.
   • A shares are traded in RMB and can only be purchased with that currency.
4. 4 Find a list of mainland Chinese companies listed on the New York Stock Exchange (NYSE).
   • NYSE attracts investors from all over the world due to its high yield. NYSE offers access to the global investment market and allows you to invest in any company.
   • The list of Chinese stocks listed on the NYSE changes over time, so keep an eye out for such changes.
5. 5 Invest in shares of Chinese companies through ADRs. ADR (American Depository Receipt) is a tool most suitable for American investors who are interested in buying shares of foreign companies.
   • Chinese ADRs are also traded on US stock exchanges such as NYSE, American Stock Exchange, NASDAQ, or they can be bought directly from an exchange.
   • ADRs allow investors to buy shares of foreign companies without worrying about exchange rates and foreign remittances.
   • ADRs are denominated in US dollars.

Tips

• Before buying shares of foreign companies, consult with a financier; he will tell you which companies to choose.
• You can also get information about investing in stocks of Chinese companies from a broker or using specialized software.
• Before buying a stock, find out the upside potential, whether it suits your needs and goals, and the risks associated with buying those stocks.
• Be sure to find out detailed information about the company: offered goods or services, management, etc. Also, find out how this company's stock has behaved in the past.

Warnings

• It can be risky to invest in speculative stocks, small stocks, and emerging market stocks listed on the “pink slips”.

What do you need

• Money (capital)