For most investors, 2023 doesn’t need to be complicated: China is reopening and the rest of the world is slowing down. So invest in China. It’s not just that, Chinese companies are trading remarkably cheap and the government has indicated that rekindling economic growth is a priority.
I could go on but I don’t think it needs to be any more complicated than that. If there’s a KISS trade – keep it simple, stupid – in 2023, it’s China.
Yes, there are risks: China could invade Taiwan, or social issues could arise. Housing in China remains in a tough spot. But on a risk-reward basis, I struggle to find anything better. It’s like taking a time machine back to mid-2020 when the US was starting to open up.
In the currency market, that means selling USD/CNY but Chinese stocks are equally compelling as are China stimulus/growth trades like copper, which has a number of other long-term tailwinds.
