China’s equity market, valued at $14 trillion, is the second-largest in the world, and since 2024, it has seen impressive growth. Major indices like the Shanghai SSE Composite and CSI 300 have surged, with the SSE gaining nearly 30% between September and October 2024. This rally has continued into 2025, despite the Indian and US markets facing challenges. Global investors are taking notice, and thanks to trading platforms like Appreciate, Indian investors now have an easy way to participate in this surge.
Reason Behind the Surge
The Shanghai Stock Exchange (SSE) Composite Index reached its peak of 6,124.04 points on October 16, 2007, and has struggled to surpass the 4,000-point mark for the next 18 years, with only a brief spike in 2015. However, in October 2024, the SSE Composite saw its biggest single-day gain in almost two decades, jumping 8.1%. Between September and October 2024, it surged by nearly 30%, its highest in decades. Other major Chinese indices, like the CSI 300 and Hong Kong’s Hang Seng, also posted 30% gains during the same period. This rally has continued into 2025, with the Hang Seng up 21.82% YTD, and the SSE and CSI 300 maintaining slight positive returns.
This rally is noteworthy because it comes amid a downturn in both the Indian and US markets. Despite hitting record highs in early 2025, the S&P 500 is down 3.42% YTD, largely due to inflation and tariff concerns. Meanwhile, India’s Nifty has been recovering from its worst correction in nearly three decades.
Government Stimulus Measures
In September 2024, China’s central bank rolled out its largest stimulus package since COVID-19, including interest rate cuts and a 15% minimum down payment for home loans. Additionally, a 500 billion yuan ($70 billion) funding program was launched to support the stock market and stabilize financial markets.
FII Investment
Foreign Institutional Investors (FIIs) shifted their focus from India to China. Following a massive $10 billion sell-off from India in October 2024, FIIs adopted a “Sell India, Buy China” strategy, fueling the rally in Chinese stocks.
Advancements in Emerging Technologies
The launch of DeepSeek in 2024 had a significant impact, causing a major decline in US tech stocks, including a 17% drop in Nvidia. Chinese companies like BYD, known for their EV innovations, also attracted significant FII investments, contributing to the rally in China.
How Can You Benefit From This?
With China’s stock markets rallying, Indian investors have multiple ways to tap into this growth. One of the easiest and most effective ways is through Exchange-Traded Funds (ETFs), which offer diversified exposure to Chinese stocks without the complexities of direct investments.
Instead of picking individual stocks, ETFs allow investors to track broad market indices or specific sectors, making them a safer and more convenient way to invest in China.
Platforms like Appreciate have made it even easier for Indian investors to get their hands on ETFs tracking Chinese indices.
Here are some of the ETFs Indians can consider to diversify their portfolios into the Chinese markets:
iShares MSCI China ETF (MCHI)
MCHI offers broad exposure to large and mid-sized Chinese companies across various sectors, including technology, finance, consumer goods, and industrials.
It is one of the most comprehensive China-focused ETFs, returning 16.04% YTD. The expense ratio of this ETF is just 0.59%.
iShares China Large-Cap (FXI)
This ETF, managed by BlackRock, offers investors access to 50 of the largest and most actively traded companies in China. With YTD returns of 16.66%, FXI carries a slightly higher expense ratio at 0.74%
Invesco China Technology ETF (CQQQ)
CQQQ is a China-focused tech ETF that invests primarily in technology, software, and semiconductor companies. It provides exposure to China’s innovation-driven economy, making it an excellent pick for investors betting on China’s AI, cloud computing, and digital transformation sectors.
This ETF has returned 13.63% YTD and carries an expense ratio of 0.65%
*Data mentioned are as of May 6, 2025
Conclusion
Investing globally offers several advantages, such as portfolio diversification, access to high-growth markets, and exposure to innovative industries like technology and AI. By spreading investments across various international markets, you can protect your portfolio from the impact of a downturn in any single country. For instance, in early 2025, while the Indian markets were struggling, both the Chinese and US markets were thriving.
To not miss out on such growth opportunities in the future and to diversify your portfolio globally, Download the Appreciate app from the Google Play Store today.
Disclaimer: Investments in securities markets are subject to market risks. Read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory.
