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7 Key Chinese Industries Ripe for Investment

Certain Chinese industries, including new energy and new materials, are expected to see rapid growth in the coming years

Alanna Petroff 16 May, 2012 | 5:06PM

Biotechnology and new energy are amongst the seven most promising Chinese industries that will be seeing remarkable growth over the next few years, explained Philip Ehrmann, fund manager and China specialist at Jupiter Investment Management Group. Ehrmann was speaking at the sixth annual Morningstar Investment Conference in London.

Below are the seven industries Ehrmann highlighted during his talk:

- New Energy (For example: nuclear, wind, solar)

- New Energy Cars (For example: hybrids, electric vehicles, fuel cells)

- High-End Capital Equipment (For example: planes, trains, robotics)

- Energy Saving and Environmental (For example: pollution control and efficiency)

- New Generation IT (For example: cloud computing, software, digital technology)

- Biotechnology (For example: biomedicines, medical services and equipment)

- New Materials (For example: rare earths, LED, performance metals)

The Chinese government has specifically outlined its commitment to foster these industries, says Ehrmann, which makes him even more confident in their future prospects. But aside from government promises and mandates, these industries are relatively small in China, but are expected to experience enormous growth over the long run.  Currently, these industries are small and are only contributing 3% to China’s GDP, but in the long run they are expected to contribute roughly 15% to China’s GDP, says Ehrmann.

There are also a number of well-established Western companies that are reaping the benefits from expanding into China, says Ehrmann. These include Carrefour (CA), Rolls-Royce Holdings (RR.) and LVMH (MC), he says.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.