How to invest in Chinese stocks from Australia

Its economy is booming, but US tensions could force Chinese stocks off American and Australian exchanges.

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To buy Chinese stocks from Australia you need to have a brokerage account with access to the right stock exchanges.

While it can be tricky to trade on Chinese stock exchanges directly, you'll find many Chinese-owned companies trade on Australian or US markets. These markets are much easier to access from Australia. This guide covers either option.

What are Chinese stocks?

Chinese stocks originate from companies that are headquartered in China. There are multiple Chinese stock exchanges — including the Hong Kong Stock Exchange, the Shanghai Stock Exchange and the Shenzhen Stock Exchange.

How to buy Chinese stocks from Australia

There are a few ways for Australian investors to add Chinese stocks to their portfolios, including stocks and exchange-traded funds.

Some international brokerage accounts let you purchase Chinese stocks directly from Chinese exchanges. Just a few brokers in Australia offer direct access to Chinese markets, including Tiger Brokers and Interactive Brokers.

For investors that don't have a brokerage account with access to Asia, numerous Chinese companies also list shares on US exchanges and the Australian Securities Exchange. Brokers offering these markets in Australia are far more numerous.

ETFs that track Chinese stocks are another way for Australian investors to diversify into Chinese investments, such as the iShares China Large-Cap ETF.

Chinese stocks listed in Australia

Over 50 Chinese stocks trade on the ASX. You can buy, sell or hold these stocks with a domestic brokerage account the same way you would any Australian stock.

Chinese-listed stocks

There are many well-established Chinese companies that don’t trade on Australian exchanges. If you hold an international brokerage account with access to Hong Kong or Mainland China exchanges, you can purchase shares directly.

Some major Chinese companies include:

  • China Railway Construction (CWYCY)
  • China Railway Group (CRWOF)
  • CITIC Ltd (CTPCF)
  • Industrial and Commercial Bank of China (IDCBY)
  • Ping An Insurance (PNGAY)

Which ETFs track Chinese stocks?

Another option for Australian investors interested in adding Chinese stocks to their portfolio is by purchasing ETFs that invest in Chinese companies. While this is a less direct investment than purchasing shares, an ETF that tracks Chinese stocks offers broad exposure to a number of securities as opposed to just one.

  • iShares China Large-Cap ETF
  • VanEck Vectors China New Economy ETF
  • VanEck Vectors FTSE China A50 ETF
  • Global X MSCI China Consumer Discretionary ETF

Compare trading platforms

Many Chinese stocks can be purchased from a domestic brokerage account. Narrow down your options by comparing features, fees and research tools.

Name Product Standard brokerage fee Inactivity fee Markets International
eToro (global stocks)
US$0
US$10 per month if there’s been no login for 12 months
Global shares, US shares, ETFs
Yes
Zero brokerage share trading on US, Hong Kong and European stocks with trades as low as $50.
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
Join the world’s biggest social trading network when you trade stocks, commodities and currencies from the one account.
IG Share Trading
$8
$50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares
Yes
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, plus get access to 24-hour customer support.
Superhero share trading
$5
No
ASX shares, US shares
Yes
Earn up to 15,000 Qantas frequent flyer points when you transfer an exisiting balance or trade. Offer valid for all new and existing Superhero members until 28 February.
Pay zero brokerage on US stocks and all ETFs and just $5 (flat fee) to trade Australian shares from your mobile or desktop.
ThinkMarkets Share Trading
$8
No
ASX shares
No
Limited-time offer: Get 10 free ASX trades ($0 brokerage) when you open a share trading account with ThinkMarkets before 31 December 2021(T&Cs apply). $8 flat fee brokerage for CHESS Sponsored ASX stocks (HIN ownership), plus free live stock price data on an easy to use mobile app.
Bell Direct Share Trading
$15
No
ASX shares, mFunds, ETFs
No
Finder Exclusive: Get 5 free stock trades and unlimited ETF trades until 31 Dec 2021, when you join Bell Direct. T&Cs apply.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
Saxo Capital Markets (Classic account)
$5
No
ASX shares, Global shares, ETFs
Yes
Access 19,000+ stocks on 40+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
CommSec Share Trading Account
$10
$0 for ASX shares, US$25 for global
ASX shares, Global shares, Options trading, ETFs
Yes
Trade with Australia's largest online stockbroking firm.
Enjoy fast, simple and affordable trades, with market leading research and broker recommendations all in one platform
CMC Markets Invest
$11
No
ASX shares, Global shares, mFunds, ETFs
Yes
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, ETFs and managed funds, plus access up to 15 major global and Australian stock exchanges.
SelfWealth (Basic account)
$9.5
No
ASX shares, US shares
Yes
Trade ASX and US shares for a flat fee of $9.50, regardless of the trade size.
New customers receive free access to Community Insights with SelfWealth Premium for the first 90 days. Follow other investors and benchmark your portfolio performance.
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Compare up to 4 providers

Important: Share trading can be financially risky and the value of your investment can go down as well as up. Standard brokerage is the cost to purchase $1,000 or less of equities without any qualifications or special eligibility. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Why invest in Chinese stocks?

China’s economy is on the rise, and its businesses are poised for growth. China is the world’s second-largest economy, second only to the United States. And it enjoys this position thanks to an average economic growth rate of over 6% for nearly 30 years, making it the fastest-growing major economy in the world.

China is also the world’s largest exporter, boasting an export value of approximately $2.5 trillion USD in 2019, according to Statista. In fact, the country’s year-over-year export growth hovered near 17% from 2002 to 2012.

The bottom line? China is a major driver of economic growth and backing Chinese companies presents a potentially lucrative investment opportunity for Australian investors.

Risks of investing in Chinese stocks

Chinese stocks present unique risks. Many Chinese companies are state-owned and ongoing tensions between China and the US and Australia, could result in Chinese stocks being delisted from US and even Australian exchanges.

In 2017, there were 102 state-owned enterprises (SOEs) in the Fortune Global 500. Of those SOEs, 75 of them were from China. In fact, there are over 150,000 state-owned enterprises in China, according to the China Journal of Accounting Research. Why does this matter? These SOEs have been accused of receiving unfair advantages, like low-cost loans, while yielding less competitive returns than their privately run counterparts.

China has plans to reform its SOEs, but it’s difficult to say what this reform will look like or what impact it could have on privately-held Chinese companies.

And speaking of reform, ongoing tensions between China and the United States have led to the Holding Foreign Companies Accountable Act: a bill introduced by the US Congress that requires companies listed on US exchanges to declare any connections with foreign governments. The bill also states that companies listed on US exchanges must submit to audits of the company’s financial performance.

For Chinese companies listed on US exchanges, the bill is problematic and could potentially result in numerous Chinese stocks delisting from US exchanges.

Bottom line

There are numerous ways to invest in Chinese stocks from an Australian brokerage account. And for those who prefer to invest in Asian markets directly, brokers like Tiger Brokers and Interactive Brokers offer international brokerage accounts.

Before you open an account, explore available trading platforms by fees and available markets to find the broker that is best positioned to serve your investment goals.

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