Chinese stocks present a growing case, with some caveats.

The article notes Chinese equities trade at roughly 40% lower valuations than U.S. peers and highlights rapid technological progress, while warning of political risks and a decade of weak market returns (about 2.8% annual for a Canadian China ETF).

Mark Carney and others are prompting a reassessment of Canada’s stance toward China, and the article outlines why investors might re-evaluate Chinese equities. Chinese stocks currently trade at much lower valuations than U.S. peers and offer exposure to key growth industries such as electric vehicles, batteries and solar. The piece also highlights China’s rapid advances in research areas like artificial intelligence and other emerging technologies. At the same time, it underscores political risks and weak past market returns for Chinese-listed investments. Key points: - Chinese equities are described as trading at about 40% lower valuations than U.S. counterparts. - China dominates global manufacturing and is a leader in industries such as batteries, electric vehicles and solar power, and is rapidly advancing in fields like AI and quantum research. - The article cites political risks, including past policy U-turns (for example, the one-child policy and strict pandemic lockdowns) and the 2020 tech-sector crackdown. - Over the past decade, a Canadian investor in the iShares China Index ETF (XCH-T) is reported to have earned about 2.8% per year while experiencing high volatility. - The author suggests that a modest allocation (reported as 5–10%) to China or related emerging markets could diversify exposure, noting the trade-offs between opportunity and risk. Summary: The article presents a balance between opportunity and caution: lower valuations and technological progress make China a notable source of potential long-term gains, but political intervention and disappointing past market returns have constrained investor outcomes. The author frames a modest allocation to China or emerging markets as a way to diversify, while stopping short of recommending large bets. Undetermined at this time.