The Rise And Stall of China

 I don’t invest in China.

When I chose an international stock market ETF, I bypassed the Middle Kingdom, purchasing Vanguard’s first world index for its absence of Chinese companies.

Am I bit backward? You might think so.

But exposure to the world’s fastest growing economy might be a drag on a globally diversified portfolio.

You can read the rest of the article at Assetbuilder’s site

no one has more first hand experience helping expat investors

Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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7 Responses

  1. essential reading for visitors to andrew hallam website

  2. André says:

    Interesting article Andrew. I also happen to be skeptical about what yhe chinese government want us to believe. Be the economic growth, business ethic or work conditions for chinese workers. Here is an interesting documentary that a team of french reporters have prepared for the french television on Foxconn. Foxconn is the big manufacturer of Apple products. After I saw it, I started to have a different look at Apple and the like.

  3. Anluren says:

    Well, I do enjoy your book and you blog, but I'm not sure I agree with you about China.

    You may want to read the comments for the book predicting about China:

    As a Chinese Canadian, I have witnessed the real development and many issues you mentioned.

    I don't know what will China be from economical perspective.

    • Sadly, the Chinese stock market, as an aggregate, hasn't made a penny in 20 years, despite incredible economic growth. I'm not willing to put my money into that sort of corruption. It will have skyrocketing years, for sure, as it has in the past. But if it's corrupt, it will hurt shareholders (as it has) long term, rather than benefiting them.



  4. rick says:

    I read you book. And I am looking for a car, does that strategy work everytime for you? Do you have any other tips?

  5. Robber Baron says:

    Numerous other developing economies share corruption and false /incomplete financial reporting. It's part of the risk when investing outside the mainstream markets of N.America, W.Europe, Japan, Australia/NewZealand, and perhaps a few other exchanges with strict reporting and enforcement systems.

    Having said that, some markets have been profitable the past decade despite "fuzzy" bookkeeping. I'm not sure what makes the difference.

    • You're right Robber Barron.

      What's interesting, however, is despite the often meteoric rises and falls and rises of developing markets, they have underperformed developed markets since records were first kept, in 1985. As a wimpy investor myself, I have chosen to skip the developing market roller coaster. That doesn't mean it won't outperform in the next decade. Who knows?

  6. Daniel says:

    Andrew I think I was in Yunnan at the same time you were! However I was in Kunming and then the very south of Yunnan near the borders of Laos and Myanmar. My wife is from China.

    Anyways. . one of my worst performing investments was when I purchased shares of Youku. . China's version of Youtube. Knowing how awful the state controlled TV was for content, I thought Youku was a sure winner. . however no Chinese internet company is outside of the censorship rules. . Many Chinese companies on the NYSE have actually pulled out. They did not like the scrutiny of their accounting and books that all companies listed on the NYSE undergo. Most Chinese companies can not stand up to a thorough investigation of their accounting. I think it is actually very hard for a company in China to be successful by simply following all the regulations and bureaucracy. But they must be transparent if they want to be on the international stock markets. I won't be investing in anymore Chinese companies until things change. Sino Forest is an example that is always making headlines in Canada.

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