Direct purchase of shares on the Chinese stock exchange is not possible for individual U.S.-based investors. However, the shares of many Chinese companies trade on the U.S. exchanges as American Depository Receipts, or ADRs.
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The ADR database, sponsored by J.P. Morgan, will allow you to find Chinese shares that trade on the U.S. market. Select DR Search from the main menu, then the use the screener to find Chinese stocks. Select the NYSE and NASDAQ exchanges and China and Hong Kong under countries. There are about 100 Chinese stocks that trade on the U.S. exchanges. Pick your selected investments and make a note of the stock symbols.
An alternative way to invest in Chinese stocks is through an exchange-traded fund, or ETF, that holds Chinese company shares. The iShares FTSE/Xinhua China 25 ETF, symbol FXI, is a broad coverage ETF. Other funds, the Global X China Financials ETF, symbol CHIX; the Claymore China Technology ETF, symbol CQQQ and Global X China Consumer ETF, symbol CHIQ, allow investment in specific sectors of the Chinese economy.
ADR or ETF shares must be purchased through a stock brokerage account. You can set up an account with an online discount broker if you do not already have one. Purchase shares using the stock trading screen of your account. You must enter the stock symbol and number of shares to purchase. The Smart Money magazine 2010 Broker Survey lists Fidelity, E-Trade and TD Ameritrade as the top-rated brokers.
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