China’s stock market has staged a strong comeback in 2025, with investors turning their attention back to the world’s second-largest economy. confidence has been building thanks to improving economic growth, targeted government stimulus, and ongoing strength in innovation-led sectors like electric vehicles (EVs) and artificial intelligence (AI).
China’s GDP rose by 5.3% in the first half of the year, beating expectations and marking a step forward in the country’s post-Covid recovery. While the property market remains under pressure, consumer confidence has started to recover, supported by lower interest rates and stimulus measures.
Markets have responded positively. Chinese shares rebounded strongly earlier this year following the release of the country’s first major AI application, DeepSeek, and have continued to perform well despite the share decline seen across all markets in April after new US tariffs were announced.
While challenges remain, economic growth and the government’s support measures seem to be having an impact. Investors are also focusing on the longer-term opportunities in areas like technology.
One industry where China dominates is EVs. In 2024, more than 11 million EVs were sold in China, making up nearly two-thirds of global sales. Chinese EV manufacturer BYD generated more revenue than Tesla last year and now operates in over 100 countries. Meanwhile, battery technology from companies like CATL is pushing the boundaries of EV range and charging speed.
In clean energy, China dominates solar panel manufacturing, with over 80% of global market share. It installed more solar capacity in the first half of 2025 than the rest of the world combined.
Despite this year’s performance, valuations of Chinese companies also remain relatively low compared to other major markets, which could present opportunities for long-term investors.
Investors should remember though that investing in China comes with higher risks, including political uncertainty and market volatility. It should always form part of a well-diversified portfolio.
3 fund ideas to invest in China
FSSA Greater China Growth
The FSSA Greater China Growth fund invests in companies across the Greater China region, including China, Taiwan and Hong Kong. The fund’s managed by Helen Chen, supported by industry stalwart Martin Lau. They look for companies with a competitive advantage that others struggle to replicate. This is something like a well-known brand or the ability to raise prices for their products, without affecting demand from customers.
The fund’s currently biased towards technology, communication services and companies that could benefit from consumer spending.
Fidelity China Special Situations
Fidelity China Special Situations aims to grow capital over the long term by investing in a diverse range of Chinese companies. The investment trust invests in companies of all sizes but has a bias towards small and medium-sized companies. This includes private companies which focus on emerging trends and have significant growth potential, though these can be less liquid.
Dale Nicholls has managed the trust since 2014. He’s a veteran of Asian markets, having focused on the region for most of his near 30-year career. He focuses on companies he thinks other investors undervalue and invests in them for the long term.
Schroder Asian Alpha Plus
Investors looking for exposure to China without the volatility of a single country fund could consider a broader Asian fund. The Schroder Asian Alpha Plus fund invests in countries across Asia. Over half the fund currently invests in China, Taiwan and Hong Kong. It also invests in other emerging markets such as India and Vietnam.
The fund’s managed by the experienced Richard Sennitt, who’s been investing in Asia for over 20 years, and co-manager Abbas Barkhordar. They search Asian markets for high-quality companies that have good cash flows, strong franchises, a quality management team, and a strong business model that’s able to defend against competition.
Fund performance (percentage growth)
| 1 year (31/08/2024 to 31/08/2025) | 3 year (31/08/2022 to 31/08/2025) | 5 year (31/08/2020 to 31/08/2025) | |
| FSSA Greater China Growth | 19.12 | -0.18 | 4.14 |
| IA China\Greater China | 38.47 | 0.02 | -11.84 |
| Fidelity China Special Situations PLC | 70.13 | 32.37 | 4.85 |
| AIC Investment Trust – China / Greater China | 58.54 | 8.04 | -15.30 |
| Schroder Asian Alpha Plus | 14.64 | 17.83 | 27.98 |
| IA Asia Pacific Excluding Japan | 14.36 | 16.76 | 31.59 |
By Kate Marshall, lead investment analyst, Hargreaves Lansdown
