China is one of the fastest-growing emerging markets in the world. After posting high single-digit growth over the past two decades, the country is expected to surpass the United States and become the world's largest economy over the next few years. And with its enormous population, China's economic growth isn't expected to slow down anytime soon.
But China's stock markets have been a different story. Investor sentiment (at the market level) is the most dominant factor in explaining why China's domestic market is underperforming. So, should you follow Warren Buffett's advice and invest in Chinese stocks?
Investing in the Chinese Stock Market - Quick Guide
- Choose how to invest in the Chinese market – From individual stocks that are domiciled in China and ETFs that track Chinese stocks’ performance, to U.S. and E.U. companies growing business in China, there are many ways to get exposure to the Chinese market.
- Define your strategy – trading lets you speculate on the Chinese stocks price movement; dealing lets you take direct ownership of the Chinese shares of stocks and funds.
- Take your position – create an account with NAGA.com to start investing in the Chinese market.
- Alternatively, copy the moves of top-performing traders in real time with NAGA Autocopy.
Trade the Chinese Market Buy Chinese Stocks Copy Lead Traders
Is the Chinese Market a Good Place to Invest?
That depends on what type of investor you are. There's no doubt that the potential is huge. Perhaps no investment opportunity has captured the minds of investors in recent years more than China has. According to the World Bank, China's gross domestic product (GDP) growth has averaged almost 10% per year since 1978. The country is also home to almost 20% of the world's population as of 2022.
A low correlation with other major world markets also makes it a great diversifier. However, there are concerns about China's mounting debt, the overall sustainability of its economic growth, policies, and the country's political policies. These types of risks will prove off-putting to many.
China is still a communist country. So, despite the free-market principles it has adopted, the rules that govern a public company in China are different than those in the US, UK, or EU.
Chinese stocks are traded on the Shanghai Stock Exchange and the Hong Kong Stock Exchange. Both exchanges have similar listing requirements to those of major global exchanges. Companies have to report financial statements regularly, have audits performed, and meet other requirements of size and capitalization. Beyond that, however, rules and norms differ, which is where things get murky.
Not only do Chinese accounting standards differ from the US, UK, or EU, but regulatory differences abound. One common difference is the trading of company stock by insiders.
Can Foreigners Invest in China?
Retail investors who do not live in China can buy common shares of Chinese companies directly by registering with a Chinese authorized broker if they live in a country considered a partner of the China Securities Regulatory Commission (CSRC). Some of these countries include the US, UK, Brazil, Australia, Singapore, and Russia.
Many well-established brokerage firms have operations in China and can facilitate the process of opening an investment account to trade Chinese securities. Opening a bank account in China is not required. However, investors should be aware that funding a Chinese brokerage account with money that comes from overseas can be costly.
In recent years, the government has sought to make it easier for foreign investors to invest in Chinese stocks. It's still a tricky process, though, and there are options to avoid exposure to China’s regulations, restrictions and risks. As expected, some options are much better than others, and some options should be avoided altogether or left to the most sophisticated investors.
How to Invest in the Chinese stock market
There are at least four ways a foreigner can get exposure to the Chinese stock markets:
Indexes of local stock markets. The most widely quoted indexes in the international financial media are probably the Hang Seng Index (HSI), which tracks the Hong Kong Stock Market, and the CSI 300 Index (CSI300), which tracks 300 blue-chip stocks based in mainland China. Chinese stocks are listed on the US Stock Exchange via ADRs. An American Depository Receipt (ADR) is a negotiable certificate that represents a share or a number of shares in a foreign company. The Chinese retail giant Alibaba (BABA) trades in the U.S. as an ADR, sponsored by Citibank. Exchange-traded funds (ETFs) that focus on Chinese stocks. There are many to choose from, from the largest providers like iShares, Vanguard, and State Street SPDR. Companies with growing businesses in China. An example is Yum! Brands, Inc. (YUM), owner of Pizza Hut, KFC, and Taco Bell. These chains have seen a surge of growth in China, and the Chinese market has increasingly been a source of profit for the company.
Investors seeking direct exposure to Chinese stock markets may consider blue-chip stocks, which are typically well-established and widely held companies, that have a longer track record of operations. These characteristics can be appealing in markets that experience greater economic or regulatory volatility.
Many of them are listed directly on U.S.-based exchanges via American Depositary Shares (ADS), making it more accessible for retail investors to get exposure to Chinese stock markets.
Many years ago, these companies were market darlings. In recent years, however, virtually all of them have come under intense scrutiny due to the inability of investors to trust their financial statements. Unable to regain investor confidence, many U.S.-listed Chinese companies' share prices decreased significantly.
Those interested in short to medium-term speculation on Chinese markets via day trading or swing trading should look to Indices of stock markets based in Hong Kong, Shanghai, Shenzhen, and Taiwan. They can only be traded through CFDs.
Investors interested in owning Chinese stocks should look to index funds tracking local stock markets or professionally managed funds that focus on China. Many asset managers that offer China-focused funds have analysts in China who visit and vet companies before investing in them. Many of these funds also hedge their yuan (or renminbi) exposure back to the U.S. dollar, reducing another source of risk.
Many investors may be interested in sticking with what they know—U.S. and E.U. companies growing business in China. They can offer the best of both worlds: the advantage of strong regulations with the profit growth potential coming from China.
Stock market indexes
Investors who want to follow the Chinese markets and economy can track the indexes of stock markets based in Hong Kong, Shanghai, Shenzhen, and Taiwan.
Hang Seng Index (HSI)
The Hang Seng Index (HSI) is the benchmark stock market index for the Hong Kong financial world and is widely followed as a proxy for the Asian markets in general.
It is a weighted index of the largest companies that trade on the Hong Kong Exchange, covering approximately 65% of its total market capitalization.
Past performance is not indicative of future results
This index is thus a benchmark for blue-chip stocks and reflects the performance of the leaders of the Hong Kong exchange. It has four sub-sector indexes: HSI Finance, HSI Commerce & Industry, HSI Utilities, and HSI Properties.
The Hang Seng Index was created in 1969. It is published by a wholly owned subsidiary of Hang Seng Bank.
China A50 Index
This FTSE index gives foreign investors the chance to access the Chinese domestic market. It’s quoted in real-time and is made up of the 50 largest and most actively traded companies listed on the Shanghai and Shenzhen stock exchanges.
The China50 index is part of a group of indices specially created to enable you to invest in China's mainland stock markets. The ‘A’ means it only takes into consideration A-type shares from the 50 largest Chinese companies. The A-shares were previously only available to domestic Chinese and institutional investors.
The index is reviewed each quarter in March, June, September, and December to make sure it remains representative of the underlying Chinese market.
Taiwan Capitalization Weighted Stock Index
The Taiwan Capitalization Weighted Stock Index is an indicator comprised of stocks traded on the Taiwan Stock Exchange (TWSE), weighted for market capitalization.
The index covers all the listed stocks excluding preferred stocks, full-delivery stocks, and newly listed stocks. The highest-weighted stocks naturally have the most significant effect on the reading of the entire index.
This index was first published in 1967.
Shanghai Shenzhen CSI 300 Index (CSI300)
The Shanghai Shenzhen CSI 300 Index is designed to replicate the performance of the top 300 stocks traded in the Shanghai and Shenzhen stock exchanges and is weighted for market capitalization. As such, it is seen as a blue-chip index for mainland Chinese stocks.
The CSI 300 is considered the blue-chip index for mainland China stock exchanges, as it tracks both the Shanghai and the Shenzhen markets.
Introduced in 2005, the index is managed by China Securities Index Co., Ltd., which maintains 5,000 indexes in 16 nations.
Chinese stocks
Investing in the Chinese stock market in 2025 is attractive due to government stimulus and monetary easing, undervalued stock prices relative to global peers, technological innovation driving new growth sectors, and a potential return of foreign capital.
VanEck emphasizes the shift to a more assertive and systematic monetary policy by the PBOC in 2025, which is expected to stabilize the yuan, ease financial conditions, and restore equity valuations.
Institutional forecasts suggest a positive Chinese stock market trajectory supported by policy measures and improving corporate fundamentals, making China a key consideration for diversified global equity portfolios with some of the best stocks in 2025.
We selected the following Chinese stocks based on positive analyst coverage, strong business fundamentals, and future growth prospects.
Alibaba (BABA)
Alibaba Group Holding Limited (NASDAQ: BABA), the Chinese e-commerce and technology conglomerate, is considered by analysts one of the best Chinese stocks to buy in 2025 due to robust fundamentals, AI innovation, and strategic positioning.
Alibaba is aggressively investing in artificial intelligence (AI) and cloud infrastructure, positioning itself as a leader in these high-growth areas. Its Qwen AI model family is highly popular globally, with over 90,000 derivative models and 290,000 companies and developers using its APIs.
Past performance is not indicative of future results
Alibaba has formed a strategic partnership with Apple to provide AI services for iPhones in China, enhancing its cloud division’s credibility and potential revenue. Additionally, its recent primary listing in Hong Kong and participation in the Southbound Stock Connect have expanded its investor base and attracted significant institutional inflows.
Alibaba trades at a reasonable price-to-earnings (P/E) ratio of about 13.5, with a market capitalization around $300 billion, suggesting it is attractively valued relative to its growth potential. Despite past regulatory challenges and geopolitical risks, this top Chinese stock has surged over 40% in 2025, reflecting renewed investor confidence.
Baidu, Inc.
Baidu, Inc. (NASDAQ: BIDU) was incorporated in 2000 and is headquartered in Beijing, China. The company’s undervaluation, strong innovation pipeline, and anticipated turnaround in advertising revenue are supporting it as one of the best Chinese stocks to buy in 2025. However, investors should remain mindful of ongoing macroeconomic risks and near-term volatility, as the recovery in core business segments may take time to materialize
Baidu is rapidly evolving from a traditional search engine company into a leading artificial intelligence (AI) powerhouse in China. Its ERNIE Bot now serves over 230 million users, and its autonomous driving platform Apollo is making significant progress, positioning Baidu to capitalize on the expanding AI market in 2025.
Past performance is not indicative of future results
The company’s AI Cloud segment is a standout, with 26% year-over-year revenue growth reported recently. This robust performance in AI Cloud is expected to continue in 2025 and is seen as a long-term growth driver that can offset ongoing weakness in Baidu’s core advertising business.
Forecasts for BIDU’s 2025 stock price are mixed, with some analysts predicting volatility and a wide range of possible outcomes—from $34.09 to $97.87 per share—reflecting uncertainty in the Chinese stock market and not only.
JD.com
JD.com, Inc. (NASDAQ: JD) is a Beijing-based company that provides supply chain-based technologies and services in the People’s Republic of China. The company offers computers, communication, consumer electronics products, home appliances, general merchandise products, and healthcare products on its platform. The company’s focus on next-generation technologies, including embodied intelligence and logistics automation, positions it for sustained growth as e-commerce evolves.
Past performance is not indicative of future results
The company has demonstrated resilience amid market challenges, outperforming key competitors like Alibaba and PDD Holdings in 2024. Price forecasts for 2025 suggest substantial upside, with some estimates projecting the stock could reach an average of $60.83, nearly 80% above its current price of around $34.
Pinduoduo Inc. (PDD)
Pinduoduo Inc. (PDD) is one of the top Chinese stocks to monitor. The company operates an e-commerce platform in the People’s Republic of China.
Pinduoduo’s rapid revenue and earnings growth, innovative and effective business model, substantial planned investments, and attractive valuation make it one of the best Chinese stocks to consider for investment in 2025.
Past performance is not indicative of future results
Analysts expect continued robust growth with a projected revenue CAGR of 38% from 2023 to 2026, driven by market share gains in China and expansion of its cross-border platform Temu. Pinduoduo plans to invest over $13 billion (around 100 billion yuan) over the next three years to strengthen its e-commerce ecosystem and support merchants, which should enhance its competitive edge and long-term growth prospects.
ZTO Express (Cayman) Inc. (ZTO)
ZTO Express (Cayman) Inc. (NYSE: ZTO) is a Shanghai-based provider of express delivery and other value-added logistics services for Chinese markets, serving e-commerce and traditional merchants. ZTO Express is considered one of the best Chinese stocks for 2025 and beyond due to its strong volume growth outlook, solid revenue performance, attractive valuation, potential for enhanced shareholder returns, and favorable analyst price targets.
Past performance is not indicative of future results
Price forecasts for 2025 average around $32.78, implying a significant upside (over 70%) from current levels, with longer-term projections indicating steady growth through 2050.
NetEase, Inc. (NTES)
NetEase, Inc. (NASDAQ: NTES) is headquartered in Hangzhou, China, and the company provides online services consisting of diverse content, community, communication, and commerce in the People's Republic of China and internationally. The company operates through Online Game Services, Youdao, Cloud Music, Innovative Businesses, and other segments.
NetEase is one of the best Chinese stocks to consider for exposure to a leading technology and gaming company with strong earnings growth, expanding international presence, diversified business segments, and positive analyst sentiment.
Past performance is not indicative of future results
Deutsche Bank recently initiated coverage with a “Buy” rating and a price target of $130, highlighting NetEase as the second-largest online gaming company in China with strong overseas expansion potential.
Li Auto Inc. (LI)
Li Auto Inc. (NASDAQ: LI) was founded in 2015 and is headquartered in Beijing, China. The company designs, develops, manufactures, and commercializes new energy vehicles for China markets and not only.
Investing in this top Chinese stock in 2025 is supported by strong sales growth, market leadership in premium SUVs, innovative product launches, and an attractive valuation relative to peers. However, investors should consider competitive pressures and technological challenges in the rapidly evolving EV market.
Past performance is not indicative of future results
Analysts and forecasts suggest the stock could rise significantly, with price targets ranging from around $41 to $54 per share in 2025, indicating potential upside from current levels near $28.
Nio Inc (NIO)
NIO Inc. is mainly engaged in the design, development, manufacture, and sales of high-end smart electric vehicles. The Company develops battery-swapping technologies and autonomous driving technologies. Its electric vehicles apply NAD (NIO Autonomous Driving) technology, including the supercomputing platform NIO Adam and super sensing system NIO Aquila. The Company is also engaged in the provision of charging piles, vehicle internet connection services, and extended lifetime warranties. The Company mainly conducts its business in the domestic market.
Past performance is not indicative of future results
Analysts project a significant upside in Nio’s stock price for 2025, with forecasts averaging around $17.84 and some predicting highs up to $32.90, representing potential gains of over 350% from current levels near $3.96. Even more conservative estimates from Deutsche Bank expect the stock to double to $9.00 by 2025.
Xpeng
XPeng is a leading Chinese Smart EV company that designs, develops, manufactures, and markets Smart EVs that appeal to the large and growing base of technology-savvy middle-class consumers in China. Its mission is to drive Smart EV transformation with technology and data, shaping the mobility experience of the future.
In Q1 2025, XPeng delivered a record 94,008 vehicles, a 331% increase from the previous year, demonstrated remarkable growth in vehicle deliveries, with a 273% year-over-year increase in April 2025 and consistently surpassing 30,000 deliveries monthly for six months, signaling robust demand.
Past performance is not indicative of future results
XPeng stock has surged significantly in 2025, with forecasts suggesting potential further gains of over 140% based on technical analysis and strong fundamentals. As a top Chinese stock, it holds a bullish analyst consensus with a Zacks Rank #2 (Buy), reflecting optimism about its growth trajectory and improving financials.
Tencent Music Entertainment Group (TME)
Tencent Music Entertainment Group (NYSE: TME) is headquartered in Shenzhen, China, and it operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services for the Chinese market. It is the largest music streaming platform in China with around 600 million monthly active users, benefiting from the early-stage development of the Chinese music streaming market and limited competition like YouTube.
Past performance is not indicative of future results
Institutional investors such as Ethic Inc., Barclays PLC, and Matthews International Capital Management have recently increased their stakes, indicating growing institutional support.
ETFs holding Chinese stocks
Another consideration is an exchange-traded fund (ETF). ETFs are investment vehicles that can provide exposure to a certain region, investment strategy, theme, or asset class as they contain an ample basket of instruments that fit the fund’s scope and reach.
ETFs trade as regular stocks. Investors in them are entitled to receive dividends and capital gains corresponding to the number of shares of the fund that they own.
There are plenty of options available that focus on Chinese equities, making it relatively easy to invest passively in a broad array of China-based corporations.
They will typically aim to mimic the performance of a broad-market benchmark such as the above-mentioned.
iShares FTSE China 25 ETF
The iShares FTSE China 25 ETF seeks daily investment results, before fees and expenses, that correspond to two times (2x) the return of the FTSE China 50 Index (the Index) for a single day, not for any other period. The Index consists of 50 of the largest and most liquid Chinese stocks listed and traded on the Stock Exchange of Hong Kong.
Past performance is not indicative of future results
International Stocks with exposure to the Chinese market
Contrary to popular perception, Apple (AAPL) generates only about 17% of its revenue from the Chinese market. Boeing (BA), Caterpillar (CAT), General Motors (GM), Starbucks (SBUX), Nike (NKE), and Ford (F) are some other US companies with a strong presence in the country. But none of them get more than 25% of their revenue from China.
Morgan Stanley and Thomson Reuters just published their Global Exposure Guide, which tracks revenue and cost exposure by region. Here are some of the most popular American stocks and European stocks with high exposure to the Chinese market, available on the NAGA WebTrader platform:
US Stocks
European Stocks
The stocks and ETFs highlighted on this list are sourced from industry analysts, but they may not be a perfect fit for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.
The Benefits and Risks of Investing in China
China's economy may have a solid track record of success, but its stock market has been a different story. The government's efforts to contain growth led the Shanghai Composite to fall 25% in 2015, making it one of the worst performers in the world. As a result, international investors should be aware of the benefits and risks before investing in the Chinese stock market.
The benefits of investing in Chinese markets include:
Strong Economic Growth
China has reported high single-digit economic growth over the past two decades, making it the fastest-growing major economy in the world.Rising Global Status
China holds a significant amount of U.S. debt and is poised to become the largest economy in the world, giving it growing sway in global politics.
The risks of investing in Chinese markets include:
Less Predictability: China has a government that has proven less predictable than democratic governments like the U.S. or E.U. members. Social Instability: China's richest 1 percent owned more than one-third of the total national household wealth, while the poorest 25 percent owned less than 2 percent. This wealth disparity could potentially lead to social instability or rapid capital outflows. Changing Demographics: China's economic success has been due to a cheap and young workforce, but those demographics could be changing with its aging population.
Trade and invest in Chinese markets with NAGA.com
Investing and trading are both ways to get exposure to the Chinese stock markets. Even though both offer the potential to profit from the financial markets, they differ fundamentally.
Invest
Investing means that you will own the physical shares of stocks and funds until you decide to sell them. When investing, you need to commit to the full value of the investment upfront. If your shares are worth more when you sell them than when you bought them, you’ll make a profit. But, if the price has declined, you’ll incur a loss. While the potential for profit is technically unlimited, your losses are capped at your full initial outlay.
You might want to invest in Chinese stocks if:
- You’re interested in buying and selling Chinese assets (stocks and ETFs)
- You’re focused on longer-term growth
- You want to build a diversified portfolio
- You want to take ownership of the underlying asset
- You want to gain voting rights and dividends (if paid)
Want to buy some of the best Chinese stocks in 2025?
NAGA.com offers 3.000 stocks and ETFs with ownership, including some of the leading Chinese companies listed on the global stock exchanges.
Trade
Trading, on the other hand, enables you to predict share price movements without owning the underlying asset – and you can go long or short. This means that you can speculate on rising as well as falling prices. You also don’t need all the capital upfront, as you’ll trade using leverage. All you need to open a position is a small deposit called a margin. Keep in mind that leverage magnifies both potential profits and possible losses. This makes it vital that you manage your risk properly.
Do you want to practice trading? Open a NAGA.com demo account to trade in a risk-free environment.
You might want to trade the Chinese stock markets if:
- You are interested in speculating on the underlying price of the assets (stocks, indexes, ETFs, commodities, bonds, currencies, cryptocurrencies)
- You want to trade rising and falling markets – going long and short
- You want to leverage your exposure
- You want to take shorter-term positions
- You want to hedge your portfolio
- You want to trade without owning the underlying asset
Want to trade some of the best Chinese stocks in 2025?
NAGA.com offers 4.000 CFDs on stocks, indexes, commodities, ETFs, bonds, forex and cryptocurrencies, providing diversified exposure to Chinese markets.
Free resources
Before you start investing and trading in the Chinese markets, you should consider using the educational resources we offer like NAGA Academy or a demo trading account. NAGA Academy has lots of free trading and investing courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a better trader or make more informed investment decisions.
Our demo account is a suitable place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for stock investors who are looking to make a transition to leveraged trading.
