How to Buy Chinese Stocks? A Complete Guide for Beginners Investing in Mainland and Hong Kong Stocks

China has recently introduced a series of positive policies to stabilize the economy, from easing measures in real estate to active policies in the stock market, attracting global investors’ attention. To participate in Chinese stock investments, the first step is to understand the core question—“How to buy Chinese stocks”—which involves choosing the right trading methods and investment products. This guide will analyze various ways to invest in mainland and Hong Kong stocks and highlight key considerations.

Comparison of Three Trading Methods: Taiwan Brokers vs. Overseas Brokers vs. CFD Platforms

Before deciding “how to buy Chinese stocks,” investors must select a trading channel. Currently, there are three main options:

Taiwan Securities Firms with Custody Accounts are the most convenient. Investors can open a custody account with a Taiwanese securities company, which places orders on their behalf to buy foreign stocks. The advantage is ease of operation, all completed in Taiwan, without cross-border remittances. The downside is high fees (usually 0.3%–1%, plus a $10–$40 minimum fee), making it costly for small investments.

Overseas Brokerage Accounts require investors to open accounts directly in the target market. For example, open a US brokerage account for US stocks, or a Hong Kong broker for Hong Kong stocks. This method generally has lower fees and more trading tools, but involves cross-border remittances (which take time and incur costs) and currency exchange issues.

CFD (Contract for Difference) Platforms are a third option. These are derivative financial instruments where investors do not directly hold stocks but track the spot prices’ movements. They offer the lowest fees, most diverse trading tools, support long and short positions, and have high liquidity. However, you cannot participate in shareholder meetings, leverage risks are present, and platform differences vary widely.

Each method has trade-offs and should be chosen based on investment amount, trading frequency, and risk tolerance.

Core Differences Between Chinese Concept Stocks and A-shares

To understand “how to buy Chinese stocks,” it’s essential to recognize the classification of investment targets.

A-shares refer to stocks listed within China, mainly on Shanghai, Shenzhen, and Beijing exchanges, priced in RMB. Since China’s stock market development started later (Shanghai and Shenzhen established in 1990, Beijing in 2021), their trading rules are relatively simpler compared to mature markets.

Chinese Concept Stocks are companies incorporated in China but listed overseas, including Hong Kong-listed “H-shares” and US-listed “American stocks.” Many leading Chinese companies choose overseas listings for three main reasons:

First, better capital liquidity. Hong Kong and US markets attract foreign capital strongly, allowing easier capital inflow and outflow, boosting their stock prices.

Second, valuation differences. Chinese concept stocks often receive higher valuations overseas, with markets more optimistic about their growth potential.

Third, market transparency. Hong Kong and US regulations are more mature, with comprehensive disclosures, increasing investor confidence and further elevating stock prices.

This explains why, under favorable policies, Chinese concept stocks often outperform A-shares. To capture China’s economic growth, investing in Chinese concept stocks is often more effective.

Notable Chinese Investment Targets

Selected Stocks

Tencent (0700.HK) is China’s most valuable company, listed in Hong Kong. As a leading representative of China’s economy, Tencent has diversified businesses including gaming, social networking, advertising, and fintech. It holds significant stakes in many companies: 14.1% in Tencent itself, over 15% in Meituan and Kuaishou, and major holdings in Sea (an overseas e-commerce platform). Tencent is a key service provider used by Chinese consumers and a major funder and strategic supporter of emerging Chinese companies, representing the overall economic outlook.

Pinduoduo (PDD.US) is a US-listed e-commerce giant founded in 2015. Its innovative “cutting” model, like “bargain shopping,” allowed rapid market share gains during economic downturns with low customer acquisition costs. Having proven its model in China, its international platform Temu has reached breakeven, with promising prospects.

BYD (1211.HK) is a leader in China’s electric vehicle industry, ranking second globally after Tesla. Starting from battery technology, it has developed a complete EV supply chain. Although priced lower than Tesla, its gross margins are comparable, with clear supply chain advantages. Its mobile parts and assembly business still have growth potential, especially as AI applications expand.

Ping An Insurance (2318.HK) is a comprehensive financial group covering banking, securities, insurance, and asset management. Insurance penetration in China still has significant growth potential. Recently, stable growth in insurance orders and a loose monetary policy environment will boost financial services, making it an important tool to participate in China’s economic recovery.

Vanke (2202.HK) is a leading property developer supported by state-owned capital like Shenzhen Metro. Although the real estate sector has faced policy restrictions, recent policy easing has revived its potential as an economic driver. Vanke’s price-to-book ratio remains low at 0.3–0.4, and with confidence in policy effectiveness, its quality land and projects could appreciate significantly.

ETFs and Indices

iShares China Large-Cap ETF (FXI) tracks the FTSE China 50 Index, comprising the 50 largest Chinese companies listed domestically, similar to Taiwan’s 0050. Compared to individual stocks, index funds better represent the overall economy. However, since A-shares are dominated by state-owned and manufacturing sectors, with less tech exposure, gains may be limited.

KraneShares CSI China Internet ETF (KWEB) focuses on Chinese tech giants, holding about 50 tech companies. Top holdings include Alibaba, Tencent, Meituan, JD.com, Pinduoduo, Beike, Ctrip, Baidu, Bilibili, and Kuaishou, accounting for over 60% of the fund. For investors optimistic about China’s tech sector, KWEB is a key reference.

Hang Seng China 50 Index (HSCEI 50) includes the top 50 Chinese mainland companies listed in Hong Kong, with more tech exposure than FXI, representing China’s growth momentum more comprehensively.

Hong Kong 50 Index (HK50) focuses on Hong Kong-listed companies, suitable for those bullish on Hong Kong’s economy.

How to Buy A-shares, Hong Kong Stocks, and US Stocks

A-shares Trading Tips

A-shares face special restrictions. RMB exchange quotas exist (e.g., Taiwan’s daily limit of 20,000 RMB). When buying A-shares via Taiwan custody accounts, transactions are usually through the Shanghai-Hong Kong or Shenzhen-Hong Kong Connect programs, which have daily capital flow limits.

The minimum trading unit is one lot (100 shares). For example, at 500 RMB per share, one lot costs 50,000 RMB. Trading hours are 9:30–12:00 and 13:00–16:00, with a midday break. A-shares have a daily 10% price limit. Investors need sufficient RMB and must trade within trading hours.

Hong Kong Stocks Trading Tips

Hong Kong stocks are more flexible. No exchange limit on currency exchange from Taiwan, and many platforms allow trading in TWD or USD, with brokers handling currency conversion. Hong Kong stocks have no daily price limit. Trading hours are the same as A-shares.

The minimum trading unit is also one lot, but the number of shares per lot varies by company—some 100, some 1,000—so investors should pay attention.

US Stocks Trading Tips

US stocks can be traded directly in USD, with no currency exchange limit in Taiwan. Trading hours are continuous, with no midday break: during daylight saving time, 9:30 PM–4:00 AM Taiwan time; during standard time, 10:30 PM–5:00 AM.

The minimum unit is one share, making it accessible for small investors. However, be aware of minimum commission fees (around $10–$40), which can make small trades relatively expensive.

Cost Analysis of Trading Methods

The costs and experiences of the three channels differ significantly:

Taiwan Brokers offer convenience and local support but have the highest fees (0.3%–1%+ minimums), with delayed quotes (about 15 minutes). Currency flexibility is good, but restrictions from Taiwan regulators and brokers limit access to some stocks. Only stocks can be traded; no margin or short selling.

Overseas Brokers have moderate to low fees, real-time quotes, and a variety of trading tools (margin, shorting, options). The downsides are cross-border remittance (time-consuming and costly) and currency exchange. Different markets require separate accounts, and operation is more complex.

CFD Platforms have the lowest or no fees, real-time quotes, and the widest range of tools with leverage. But they do not provide direct stock ownership (no shareholder rights), and carry leverage and platform risks. Proper due diligence on platform compliance is necessary.

Recommendations for Beginners Investing in Chinese Stocks

Understand Policy Environment: China’s economy and stock market are highly policy-driven. Before investing, monitor monetary, real estate, and industrial support policies.

Diversify Risks: Avoid over-concentration in a single stock or market. Use a mix of stocks, ETFs, and indices to reduce risk.

Optimize Costs: Choose channels based on investment size. Large investors may prefer overseas brokers or CFD platforms to lower fees; small investors should pay attention to minimum charges.

Learn Trading Rules: Different markets have different trading hours, limits, and minimum units. Fully understand these before trading.

Risk Warning: Political risks, exchange rate fluctuations, and policy changes can impact Chinese stocks. Assess your risk tolerance carefully, avoid excessive leverage, and do not trade emotionally.

Investing in Chinese stocks starts with selecting the trading method, then choosing targets and executing strategies. There is no absolute “how to buy Chinese stocks” answer; it depends on individual capital, trading frequency, risk appetite, and time commitment. With the tools and knowledge provided in this guide, investors can find the most suitable investment path based on their circumstances.