Chinese Stocks Are 'A Risk Worth Taking,' Says Asset Manager Amid Economic Uncertainty: '...Trading At The Cheapest They've Ever Been'

Asset manager Jason Hsu has suggested that the current low valuation of Chinese stocks presents an attractive investment opportunity.

What Happened: Hsu, who serves as the chairman and chief investment officer of Rayliant Global Advisors, believes that the current low valuation of Chinese stocks is a unique opportunity for investors. He emphasized that despite the risks associated with the Chinese market, the current low prices make it a risk worth taking, reported CNBC on Monday.

 "Chinese stocks are trading at the cheapest they've ever been. They offer such a big discount and are certainly good investments within a portfolio. There is a risk with China — with how the economy will take form — but with stocks being so cheap, it is a risk worth taking," Hsu said.

Hsu suggested that investors allocate approximately 7% to 8% of their portfolio to Chinese stocks, with the remaining funds being distributed among U.S. stocks (60%), developed markets like Japan (20%), and other emerging markets (12%).

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He also identified two specific stocks that he believes are worth considering. The first is the state-owned food and beverage company Kweichow Moutai, which he views as a good short-term play due to its “great growth story” and “a lot of brand premium.” The second is the electric vehicle manufacturer BYD, which Hsu sees as a promising long-term investment.

Why It Matters: The Chinese market has been a topic of much discussion due to its recent economic uncertainty. A prominent strategist recently stated that the valuation of Chinese stocks is “way too low,” advising investors to cautiously consider re-entering the Chinese market. This revelation comes amid a period of economic uncertainty in China.

However, other experts have warned against viewing China as a long-term investment. Top economist Mohamed El-Erian has advised treating China as a short-term speculation, not a long-term bet, due to the country’s uncertain economic future.

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