What has been happening in China in recent months has taken even the most experienced investors by surprise, who, having a significant exposure in China, found themselves closing their positions to reopen them a few weeks or even days later.

To be honest, China has always had the uncertainty factor as an investment option. Uncertainty about the real outlook of the companies in which one invests, or about the accuracy of the macroeconomic data and or even about the intentions of the Government.

The latter is what we experience for almost eight months. Simply put, the Chinese government, seeing that several companies have become too large, has decided to aggressively change the terms of the relations between public sector and private companies. The result was a strong sell-off in the technological sector and in shares of companies related to the provision of education services.

In the field of technology, China has practically done what Biden wanted for American technology companies. To limit their power. As decisions in China are made immediately and without much debate, a decision was taken to limit the size of the technology giants so as not to threaten the state of the economy at a bad time. The result created two opportunities.

First, it gives investors the opportunity to buy value-added technology and trading companies at extremely cheap valuations, even compared to US competitors.

Secondly, it gives investors a new opportunity to discover smaller companies that could now be in the spotlight and which until now were in the shadow of the technology giants.

All the above, demonstrate the importance of portfolio diversification which gives the chance to take advantage of any significant opportunity without taking a large investment risk. Although in the short term, the problems may continue to plague Chinese companies, in the long run, the investment position does not change: China is an important and necessary economy and therefore, it must be present in every investment portfolio.

There is no doubt that investors will not miss the opportunity to buy strong companies at such a big discount. A characteristic case is the Chinese tech ETF KWEB, which has gathered millions of dollars in inflows in recent days, reaching $ 6.4 billion in capital under management. The result was the technological ETF becoming larger than the MCHI which includes stocks from all sectors and to date has been the largest.