Since China launched a series of regulatory crackdown, the China stock markets have crashed severely, wiping out former gains from big names like Alibaba (down 63%) and Tencent (down 47%).
But the good news is, we might be at the tail end of the latest regulations.
In fact, early this month, regulations of the Chinese tech industries seem to be waning. And we saw many big Chinese stocks rebound from their lows.
China continues to offer good upsides
Despite the regulatory crackdowns, China continues to grow and its companies continue to innovate and rise in global dominance. We continue to see TikTok and DouYin grow even though Bytedance’s IPO failed previously.
After the market correction, the previously overvalued companies are now affordable or even undervalued.
You’re probably here because you’re bullish on China’s growth and are looking for ways to gain exposure in the China markets before the next run.
So here’s how to buy China Stocks in Singapore:
- Understand the China stock market structure
- Find out what type of China stocks you can buy
- Choose a broker with the right access
1. Understand the China stock market structure
First you’ll have to understand the structure of the Chinese stock market. We’ve detailed this in our China investing guide, but here’s an overview.
There are two domestic stock exchanges within China:
- Shanghai Stock Exchange (SSE) and
- Shenzhen Stock Exchange (SZSE)
And the Chinese companies can issue three classes of shares:
- A-shares
- B-shares
- H-shares
On top of these, Chinese companies could also list on the Hong Kong Stock Exchange and
Several others have issued American Depositary Receipts (ADRs) which are traded on the US markets.
What does knowing these matter? Well, it’ll affect which stocks you can buy:
2. Find out what type of China stocks you can buy
Depending on where it’s listed and the class of shares, access to different China stocks varies.
Confused yet? No worries, you can read the differences between A shares, H shares and ADRs in detail here. (B shares are not available for foreign investors)
Else, here’s a quick summary:
Different classes of China shares
| Share Type | Listed on? | Can non-Chinese citizens invest? | Currency | Trading Hours (in Singapore Time) |
|---|---|---|---|---|
| A share | SSE or SZSE | Yes | CNY | SSE: 9.30am to 3.00pm. Lunch break from 11.30am to 1.00 pmSZSE 9.30am to 3.00pm. Lunch break from 12.30am to 1.00 pm |
| B-share | SSE or SZSE | No | USD or HKD | As above |
| H-share | Hong Kong Stock Exchange (HKEX) | Yes | HKD | 9.30am to 4pm (Singapore Time). Lunch break from 12pm to 1pm. |
| ADRs* | US markets | Yes | USD | 10.30 p.m. to 5.00 a.m. or 9.30 p.m. to 4.00 a.m. (during daylight savings) |
*The US Securities and Exchange Commission (SEC) may order some of these Chinese companies to delist from the US exchanges. We compiled a list of companies that were flagged here, and shared what you should do if you already own them.
Some Chinese companies have multiple listings on different exchanges, (eg. Alibaba is listed in Hong Kong Stock Exchange as HK:9988 and in US markets as NYSE:BABA) there may be slight differences in their prices due to the efficiency of the different exchanges.
3. Choose a broker with the right access
Now that you have a general idea of the different types of China shares, we can start looking at brokers.
Singapore Brokers that lets you buy China Stocks
| Broker | Types of China stocks | Minimum Commission | Commission Rate | Custody Fee | Notes |
|---|---|---|---|---|---|
| Tiger Brokers | A-shares | ￥15 | 0.16% | nil | Platform fee: ￥8/order or 0.03% |
| H-shares | HK$7 | 0.03% | Platform fee: HK$8/order or 0.03% | ||
| ADR | USD 0.99 | 0.5% | Platform fee: US$1/order or 0.5% | ||
| moomoo | A-shares | ￥2 | 0.03% | nil | Platform fee: ￥15/order |
| H-shares | HK$3 | 0.03% | Platform fee: HK$15/order | ||
| ADR | $0 | 0 | Platform fee: $0 for the first year, $0.99 / Order thereafter | ||
| POEMS | A-shares | ￥80 | 0.15% | nil | Based on Cash Plus Account |
| H-shares | HK$30 | 0.08% | |||
| ADR | US$3.88 | US$3.88 flat | |||
| FSMOne | A-shares | ￥40 | 0.08% | nil | |
| H-shares | H$50 | 0.08% | |||
| ADR | US$8.80 | 0.08% | |||
| Saxo | A-shares | ￥40 | 0.15% | 0.12% pa | |
| H-shares | HK$90 | 0.15% | |||
| ADR | US$4 | 0.06% | |||
| UOB Kay Hian | A-shares | ￥80 | 0.25% | $2 per counter per month. | Custody fees are waived if you make 2 trades per month or 6 trades a quarter. |
| H-shares | HK$100 | 0.25% | |||
| ADR | US$13 | 0.30% | |||
| Maybank Kim Eng | A-shares (Limited to Shanghai Stock Exchange) | ￥80 | 0.25% | $2 per counter per month. | Custody fees are waived if you make 2 trades per month or 6 trades a quarter. |
| H-shares | HK$100 | 0.25% | |||
| ADR | US$20 | 0.30% | |||
| Lim & Tan | A-shares (Limited to Shanghai Stock Exchange) | ￥88 | 0.25% | $2 per counter per month. | Custody fees are waived if you make 2 trades per month or 6 trades a quarter. |
| H-shares | H$100 | 0.35% | |||
| ADR | US$20 | 0.30% |
Do note that the commission rates listed above do not include other trading fees like stamp duty, platform fees, settlement fees and other miscellaneous fees.You should also keep in mind that some brokers may charge a custodian fee which would eat into your profits.
So, which broker should you use? Let’s take a look starting with A-shares:
How to buy China A-shares?
Not all brokers offer A-shares access. I’ve shared some of the brokers you can use to buy China A-shares previously.
In general, to buy China A-shares, you’ll need access to a domestic brokerage account in China or Hong Kong, or check if your current broker has access to the Shanghai-Hong Kong Connect or Shenzhen-Hong Kong Connect.
How to buy China H-shares?
If you’re looking to buy China stocks listed on the Hong Kong Stock Exchange, you’ll have a wider selection of brokers. As long as your broker has access to the HKEK, you should be able to purchase H-shares.
How to buy ADRs?
ADRs are listed on the US exchanges, most brokers that have access to the US markets would give you access to ADRs.
However, do note that ADRs are not stocks, they are certificates that represent the shares and they do not give you the full rights of a regular shareholder.
If you’re bullish on China’s growth, you will find our Guide to Investing in China useful.
That said, the China stock markets are highly volatile, do remember to do your own research to make sure you’re picking the best ones for your portfolio. If you’re not sure how, join Alvin at his live webinar to learn how to use the 3Cs China investing framework.