Handy way to hop on Chinese dragon

A better way to take a ride on the Chinese dragon may be through an Australian company that does almost all of its business with China.

For Australians wanting to invest in the Chinese sharemarket, the choices are limited. For superannuation fund members, only two big super funds, the Non-Government Schools Superannuation Fund and the Victorian government’s aggregated Victorian Funds Management Corporation, have direct China A-shares portfolios.

For private investors, AMP Capital Investors has a dedicated fund and several international managers, such as BlackRock Investments, State Street Global Advisors and Fidelity Investments – the three largest managers in the world – will accept sums from “sophisticated” investors, who need an approval letter from their accountants.

But perhaps a better way to take a ride on the Chinese dragon is through an Australian company that does almost all of its business with China. Such a gateway company is ASF Group. ASF is an established mining company that has branched out into providing consulting services to Chinese companies looking to invest in Australia and Australian companies with an eye on China. It has a growing funds management arm that represents Chinese and other funds managers in Australian super funds.

ASF chairman Min Yang is a successful Chinese business woman who has various interests in China and in Australia. She says that Australian governance, such as that required by Australian Securities Exchange listing rules, should give some comfort to investors compared with making direct investments into China.

She believes, however, that Australian authorities should try to reduce the red tape restricting Chinese investment here. “The Chinese tend to get things done,” she says. “In Australia, things such as the transfer of title (for mining rights) can take a very long time and Chinese investors will often get frustrated by this.”

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