Emerging Markets

Focus On Investment Opportunities In China – Chartwell Capital

Amanda Cheesley, Deputy Editor, 14 October 2022

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As investors struggle to decide where to put their money, Ronald Chan, founder and CIO of Chartwell Capital, an investment firm based in Hong Kong, discusses with WealthBriefing investment opportunities in China, particularly the Greater Bay Area.

Despite China’s zero-Covid policy, Ronald Chan at Chartwell Capital is fairly optimistic about investment opportunities in the region, highlighting that there are hidden gems to be found. 

Although its zero Covid policy devastated the economy, he believes that the country is in the last stages of the pandemic and that the restrictions will gradually relax, province by province.

“The quarantine period in Hong Kong has already been relaxed to three days, and it will be reduced further there and in Macau,” he told this news service in an exclusive interview.

Nevertheless, he highlighted how the World Health Organisation still classifies Covid as a pandemic which exacerbates the problem because China follows their classifications. On top of that, there are a lot of poor people in China without access to proper healthcare, which makes relaxing the rules critical, he added.

“Beijing is, however, doing a lot to stimulate the economy, as the rest of the world focuses on monetary tightening. High inflation rates are hitting the US and Europe, which isn’t the case in Asia,” he said. 

He believes the smart money will return there. “The Chinese economy is still robust and it continues to grow,” he said. The trade tensions between China and the US have also de-escalated, he added.

Although there is still a lot of uncertainty, he said that there are hidden gems to be found in healthcare, for example. The firm invests in Hong Kong’s largest non-hospital provider, EC healthcare, which is thriving, he said. 

The firm also invests in the retail and manufacturing sectors, hospitality, food and beverages. With Hong Kong being a large importer of Japanese food, consequently he invests in a large Japanese food distributor in Hong Kong – Four Seas – which he said is doing well.

He highlighted how the two extremes in the Chinese retail and hospitality sectors are currently popular, with queues outside Macdonalds and Michelin-star restaurants booked up months in advance.  

The upcoming 20th National Congress of the Chinese Communist Party, which will outline policies for the next five years, starting on 16 October, should add clarity and more certainty to the market, he said. See more here on this topic.

His views were echoed by Christian Nolting, Global CIO of Deutsche Bank’s Private Bank, who highlighted in the margins of the Frieze London and Frieze Masters exhibition in London this month, the investment opportunities that exist in China. “There is more growth there, relative to the US and Europe, and the zero-Covid policy is becoming more relaxed” he told WealthBriefing.

Nevertheless, Robert Alster, CIO at Close Brothers Asset Management, was more cautious about the investment opportunities in China, saying they are still watching progress on relaxing the zero-Covid policy and want to see more progress in corporate governance.  

Chartwell is an independent, Hong Kong-based investment firm serving institutional clients such as endowment and pension funds, charitable foundations, family offices, and high net worth individuals.

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