However, the Chinese market is regulated in specific ways that restrict how foreign investors can purchase stock in Chinese companies. Scott Maderer Certified Financial Coach, Coach. This version of How to Buy Shares in Chinese Companies was reviewed by Scott Maderer on June 7, Community Dashboard Random Article About Us Categories Recent Changes.

How to Buy a Stock for the First Time -- The Motley Fool

Write an Article Request a New Article Answer a Request More Ideas Research to learn which stocks are available and right for you. There are several types of stocks that can be bought from Chinese exchanges for example, A-shares, B-shares, and H-shares.

Different regulations, fees, and procedures apply to each one. Think about choosing stocks that have the right cost, risk level, diversity, and potential returns for your particular investment portfolio. If you are relying on translated sources for information about the Chinese market, keep in mind that the sources might not be the most current or detailed.

Since foreign markets can be particularly complicated, it is a good idea to seek advice from a financial professional before investing in them. Contact your broker or investment service when you are ready to purchase stocks.

When you are ready to buy shares in Chinese companies, contact your broker, who can guide you through the process and answer any questions you may have.

With internet-based stock trading, you can also purchase stocks on your own in many cases. Visit your online investment service for details on which options are available to you. This information will be listed for each stock that is for sale.

As with any investment, there is some level of risk with buying stock in Chinese companies. No one can predict with complete certainty which stocks will succeed, but you can make an educated decision getting the best information possible from your broker or independent research. Purchase A-shares of Chinese stocks. A-shares are a class of stocks in Chinese companies that trade on the Shanghai and Shenzhen stock markets. These can only be purchased by residents of mainland China, and by certain Qualified Foreign Institutional Investors QFIIs.

These are designated by the Chinese Securities Regulatory Commission CSRC and are very large foreign financial companies such as Merrill Lynch, Goldman Sachs, Scotiabank, Deutsche Bank, and Lehman Brothers. Purchase B-shares of Chinese stocks. B-shares are a class of stocks in Chinese companies that trade on the Shanghai and Shenzhen stock exchanges. Unlike A-shares, these can be purchased by foreign investors.

B-shares of Chinese stocks are quoted in foreign currencies. B-shares listed on the Shanghai stock exchange are quoted in United States dollars, while those listed on the Shenzhen stock market are quoted in Hong Kong dollars. Purchase H-shares of Chinese stocks.

H Stock Price - Hyatt Hotels Corp. Stock Quote (U.S.: NYSE) - MarketWatch

H-shares are a class of stocks in companies incorporated in China but which trade on the Hong Kong Stock Exchange HKEx. These can be purchased from the HKEx by foreign investors. Shares are sold through the HKEx in bulk groups known as "board lots. Shares in companies listed on the HKEx must be bought in multiples of the stock's board lot amount. You can check the HKEx website in order to see which companies list H-shares, their stock codes, board lot amount, and other pertinent information.

Purchase Red Chip stocks. These stocks are issued by companies that are not incorporated in China, but which trade on the Hong Kong Stock Exchange. Red Chip stocks provide exposure to the Chinese market because companies offering them are owned by the state, provinces, or municipalities of China. P-chip stocks are issued by companies based outside of China, but which trade on the Hong Kong Stock Exchange and meet certain criteria proving their ties to the Chinese market.

Be controlled by Chinese individuals Derive more than eighty percent of its revenue from China Allocate more than sixty percent of its assets to China.

H-Shares

Do research to learn which stocks are available and right for you. There are several types of Chinese stocks that can be bought from non-Chinese exchanges.

Before purchasing any shares in a company, make sure you know and understand any fees, limits, and risks associated with its stock. N-shares are available for Chinese companies incorporated outside of the country, and are usually listed on foreign stock exchanges such as the NYSE and NASDAQ. Purchase shares in Chinese ADRs or GDRs. American Deposit Receipts, or ADRs, is a kind of representation of a non-U. There are a number of Chinese ADRs available to trade. Global Deposit Receipts, or GDRs, work much the same way as ADRs in other areas.

Consider purchasing shares in a China-focused ETF.

Exchange-traded funds, or ETFs, are like mutual funds in many ways but have a few key differences, such as the fact that they can be bought and sold throughout the day similar to stocks , and are designed to track a market index. Some ETFs focus on Chinese corporations entirely or in large part, so these can be a way of investing in the Chinese market. Consider purchasing shares in a mutual fund with Chinese interests.

If you cannot or do not want to directly purchase stocks in Chinese companies—or if you simply want to diversify your holdings—you can purchase shares in a mutual fund that invests in China. In this way, you will still indirectly tie your investment to the Chinese market while leaving the actual purchasing of Chinese stocks to the mutual fund managers. You can find out if a mutual fund invests in Chinese stocks by reviewing its profile and portfolio holdings.

Can I buy Chinese stocks as an expat working in Shanghai? You can buy B shares, but they're traded less. You might see larger spreads. Not Helpful 0 Helpful 0. Already answered Not a question Bad question Other.

If this question or a similar one is answered twice in this section, please click here to let us know. Tips Make sure you are familiar with any currency exchanges that may have to be made in the process of buying shares in Chinese companies. If you are interested in buying stocks from China, keep yourself informed about its market by reading business news and consulting with your broker or trusted financial advisor.

Make sure you understand the fees, taxes, and other costs that may be associated with purchasing Chinese stock. Warnings Investing abroad can be very risky. This type of investment should constitute a reasonable percentage of your overall portfolio. Edit Related wikiHows WH. Financial Stocks In other languages: Thanks to all authors for creating a page that has been read 65, times. Did this article help you? Cookies make wikiHow better.

By continuing to use our site, you agree to our cookie policy. About this wikiHow Expert Review By: Reader Success Stories Share yours! SM Simba Madziwa Nov 17, Home About wikiHow Jobs Terms of Use RSS Site map Log In Mobile view.

All text shared under a Creative Commons License.

Help answer questions Start your very own article today.