"The Chinese have gained achievements in only 20 years whichwould take many other countries two centuries to accomplish."
--James Wolfensohn
World Bank President.

June 2009

Since Interfund Capital started the China fund web site in the summer of 2003, the Shanghai Stock Exchange (SSE) A share index has returned 100%, with a peak at nearly 300% in October 2007. The Hong Kong Stock Exchange (HSX) has returned 100%, with a peak at 240%.

China is the world's second largest economy on a purchasing power parity basis and is driven by a population of 1.3 billion people.

In the summer of 2003, during the SARS epidemic, the principals at Interfund Capital began to believe that China might be an interesting contrarian investment. While researching China funds, it became apparent that, at that time, there were few online resources to help investors research funds and stocks which could benefit from the potential growth in Mainland China. Here is the introduction to the website Interfund Capital created to fill that void:

China enjoys a household savings rate of more than 40 percent, one of the highest in the world. As incomes rise, newly empowered consumers represent an enormous market potential.

For example, in 2009 about 7 million mobile phones are sold in China each month, the world's biggest market with nearly 670 million subscribers. That's over half the population and subscriptions are increasing at 16% per year.

In the last ten years, $400 billion to $500 billion in foreign direct investment has flowed into the country, more than the rest of Asia combined. The inflow of foreign investment brings with it new business practices, which inject vitality to the old economic system. Since 1993, labor productivity has increased four fold.

China's December 2001 accession into the World Trade Organization (WTO) is expediting economic reforms and expected to contribute 1 to 2 percent of gross domestic product (GDP) each year.

China's growth, even in the face of a global recession, has been a source of interest for investors around the world. As export income decreased, China has shifted its focus towards stimulating domestic consumption, creating new areas of investment that play on the themes of its growing middle class.