After a strong 2020, China’s stock market had a rough go of it last year. Beijing’s regulatory action and tight monetary policy led to a 29% decline in the MSCI China index. Most U.S. listed Chinese companies didn’t fare well either.
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Looking ahead to 2022, the good news is that Chinese equities are inexpensive. Using the iShares MSCI China ETF as a proxy, they have a P/E ratio of 15x compared to 23x for the S&P 500.
Combine the attractive valuation with the potential more supportive government policy and investing in China looks like a good move in 2022, i.e., the year of the tiger.
The next question is a harder one. Which stocks should U.S. investors buy?
A good starting point is to find undervalued plays on the purchasing power of the Chinese consumer. Here are three names that should…