China has been a country on my mind for some period of time now. A driving question I have is why investors have remained so careful to avoid investing in China?

China National Interest Rates From 1995 to 2019 as Compared to the United States National Interest Rates

Interbank Lending from 1995 to 2019

China is graphed in violet, while the US from 1995 onwards is graphed in yellow. US Fed rates prior to 1995 have also been included in green.

I have three initial thoughts about this:

  1. China has kept their interest rate remarkably steady throughout this ~25 year period from 1995 to 2019.

  2. Recent news reports suggest China is unlikely to follow the US in cutting the interest rate..

  3. Chinese companies should be expected to play an increasingly important role in investor’s portfolios.

I hope to contribute more thoughts and analysis to this sector in the near future.