Reconsidering Risk, Reward, and Allocation to China

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Beijing’s regulatory decision against online brokers last week, which we just wrote a note about, once again put the policy risk of investing in China in sharp focus. On days like this, we think this is the perfect time to share with you a wonderful guest piece from that will give you a systematic review of risk, reward, and the right allocation strategy to China from the perspective of someone who has been working and investing in this part of the world for almost 2 decades.Pandawatch‘s real name is Enrique Becerra, a Hong Kong–based investor who has managed his own capital full-time since 2017, focused on China A-shares and Hong Kong-listed equities. He is the author of the monthly letter “Investing in China”. He also tweets @pandawatch88. Based in Hong Kong since 2007, he spent 16 years as an M&A investment banker at Citi and Bank of America Merrill Lynch, most recently as Managing Director and Head of Asia Financial Sponsors, executing deals across Greater China, Korea, and Southeast Asia.Enjoy!Reconsidering Risk, Reward, and Allocation to ChinaBy Enrique Becerra a.k.a Why this article exists.Back in January I published a deck called A Hitchhiker’s Guide to the China Stock Galaxy: 2026–2030. I made it because in conversations with fund managers I kept hearing the same story: it has become really hard to have a meaningful discussion with US and European allocators about China.The moment someone in the room says “yeah, and what about Jack Ma”, “tutoring stocks”, or “Taiwan”, the conversation ends. Zero nuance. This piece puts these one-liners under scrutiny.Because of the…