How to buy Chinese stocks? From bull market signals to practical strategies, Taiwan investors' guide to Chinese stocks

Many Taiwanese investors look at the rising momentum of A-shares with some envy—the Shanghai Composite Index just hit a ten-year high of 3950 points in October 2025, nearly a 50% rebound from its low in September 2024. But the key question is: How exactly to buy mainland stocks? Why should you pay attention now?

Beginning of the Bull Market: Policy Bonuses Open a New Era of Asset Allocation

The story begins on September 24, 2024. On that day, China’s central bank and financial authorities held a rare joint press conference, announcing a series of measures to support the economy, marking the start of this year’s main upward wave in A-shares.

More importantly, the Chinese government is pushing a strategic shift—making mainland stocks a wealth reserve platform similar to the US stock market. This means regulators are requiring insurance companies, state funds, and other institutions to increase their stock allocations, changing the underlying market logic.

International investment banks are also responding. Goldman Sachs, JPMorgan Chase, and UBS have recently issued reports, all optimistic about mainland stocks’ prospects. Goldman even predicts that by the end of 2027, major indices could rise by about 30%.

Mainland Stock Market Fundamentals: Structure of the Five Major Indices and Top Ten Industries

To invest in mainland stocks, first understand the market structure. Many people think of the “mainland stock market” as the Shanghai Composite Index, but this index has a fatal flaw—it cannot be traded. It merely serves as a market report indicator.

The truly tradable indices are four:

CSI 300 Index is the most important, comprising the top large-cap stocks, serving as the main reference for overseas investors’ A-share investments and the most watched by mainland investors.

SSE 50 Index benchmarks large-cap blue chips, CSI 500 Index represents mid-cap companies, and CSI 1000 Index is the territory of small-cap stocks. These four indices have corresponding ETFs and derivatives (futures, options), forming the core ecosystem of mainland stock trading.

In terms of industry structure, mainland stocks are driven by finance (banks and non-bank financials) and manufacturing—traditional and emerging manufacturing sectors like electronics, pharmaceuticals, food, chemicals, and power equipment coexist. This characteristic makes mainland stock trends highly correlated with China’s macroeconomy, financial policies, and industrial cycles.

The Three Engines of the Bull Market: Liquidity, Policy, and Fundamentals

Understanding how mainland stocks operate requires grasping three drivers:

Liquidity-driven is the most direct catalyst. RRR cuts, interest rate reductions, and increased credit issuance trigger rises; conversely, rate hikes and tightening often mark the end of a bull run.

Policy and institutional-driven create a “policy market” label. Major reforms like the registration system, support for emerging industries, can ignite market rallies.

Fundamentals-driven provide long-term support. When the economy is improving and corporate profits grow rapidly, the market can go further and stay steadier.

Historically, events like the 2009 “Four Trillion” stimulus and the 2014-2015 leverage-driven bull market have demonstrated these principles and the pain of rapid reversals.

Current Opportunities: Valuation Repair and Earnings Improvement Resonance

In this rally, an important turning point is happening—international institutions generally believe that AI technology is reshaping profit models, policies against internal competition (“anti-involution”) are creating new growth space for companies, and manufacturing exports are showing competitiveness. These factors are expected to boost corporate profit growth rates to around 12%.

Looking at valuations, the MSCI China Index’s forward P/E ratio is currently 12.8x, above the 10-year average of 11x. Although still at a discount compared to the US S&P 500’s 22x, this gap is narrowing—there’s considerable room for valuation repair among Chinese tech giants.

But risks must also be recognized: in the current rally, valuation expansion has contributed more than fundamental improvement. If macroeconomic recovery falls short of expectations or corporate profits do not meet forecasts, the market may face correction pressures.

How can Taiwanese investors buy mainland stocks? Two pathways fully explained

Domestic channels: Custodian services

The easiest way is through Taiwan brokerage firms’ custodian services. Simply place orders via your Taiwan securities account, with the broker executing on your behalf. The process is familiar, and fund transfers are convenient. The main advantages are ease of capital operation and comprehensive Chinese-language platform support.

Foreign channels: Overseas brokers

Another option is to open an overseas securities account to directly trade mainland stocks or Hong Kong stocks. These platforms usually offer a broader range of products, including stocks and derivatives.

When choosing, consider four factors: platform compliance and strength, ease of fund deposits, product variety, operational smoothness, and Chinese-language support.

Curved-line investment: Mainland companies listed in Hong Kong and the US

Many top mainland companies are also listed in Hong Kong and the US—Tencent, Alibaba, and other giants have both A-share and H-share listings. For Taiwanese investors, this is an effective way to share in mainland stock profits.

Quick overview of five representative companies

After comprehensive evaluation, the following five companies are worth monitoring:

Investment rhythm and risk balancing

Entry logic: Mainland stocks are shifting from valuation repair to earnings-driven growth, with long-term value clearly increasing. But short-term risks include macroeconomic recovery falling short, which could challenge profit support.

Recommended strategies:

• Use multiple channels to diversify mainland stock investments
• Focus primarily on blue-chip indices like CSI 300
• Regularly assess whether fundamental improvements match current valuations
• Set reasonable stop-loss points to guard against policy or economic shocks

Mainland stocks have transformed from last year’s “not worth investing” to this year’s “worth allocating,” driven by tangible policy support and profit improvement. But any investment decision should be based on your own risk tolerance and investment horizon. What matters now is understanding this market, choosing the right way to buy mainland stocks, rather than blindly following the crowd.