China has a highly unusual business environment- the government is currently holding 2 Canadians hostage to benefit a private company (Huawei). Those with the right connections regularly use government resources for their own benefit. As far as investing in Chinese stocks go, it is a trap for foreign capital:
- Massive fraud.
- The CCP encourages mainlanders to be racist, nationalist, and xenophobic.
- Because of state-sponsored racism and xenophobia, there are far fewer (or no) consequences when somebody cheats a foreigner versus an ethnic Han Chinese citizen.
- The CCP often exploits foreign capital and sponsors the theft of intellectual property.
- Relations between the CCP and most developed countries will deteriorate because the CCP has been increasingly antagonistic towards other countries. The resulting trade wars will hurt China’s economy and make the environment sketchier for foreign capital.