The Chinese economy has been the engine of global economic growth since the start of the new millennium. However, over the last two years there have been concerns over a sharp slowdown in the world’s second-largest economy.
China has been looking to transition from an export and investment reliant economy to one that is more reliant on consumers. This transition though has led to a drop in growth rates, raising concerns of an economic crash. As the economy has slowed down sharply, policymakers have been forced to change strategy and announce stimulus measures to boost short-term economic growth.
These measures are finally starting to have an impact. Economic data released over the past month has shown that the Chinese economy is strengthening, especially the housing market. The pick up in the Chinese economy makes BMO China Equity Index ETF (TSX: ZCH) an attractive proposition.
The fund has been designed to replicate the performance of the broad Chinese equity market through passive investments in securities and derivative instruments that track a widely recognized Chinese equity index. The fund’s top holdings include Alibaba Group, the Chinese e-commerce giant, and China Mobile Ltd.
