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Barry Lau From Komfie Manalo, Opalesque Asia:

China has a reputation for presenting huge challenges for investors, particularly in due diligence and security of assets. This "bad image" is preventing many investors from investing in China. But fund managers in Hong Kong and China have actually found good opportunities there.

During the latest Opalesque Hong Kong Roundtable, Barry Lau, Managing Partner at Gen2 Partners, an investment advisory firm based in Hong Kong with $1bn in assets, explained the two main opportunities he sees in China: one being in financing, the other in the type of shares one should invest in.

"1) On the direct investment side, we see the provision of private loans as a fantastic solution. Whilst most observers would argue that China has an abundance of liquidity, there are only a limited number of methods for SMEs in China to access financing for growth. By way of background, 99% of all corporate in China are SMEs; SMEs contribute to 60% of GDP in China and they collectively create 75% of full time employment; yet, SMEs are only recipients of 25% of traditional bank financing. This dichotomy is symptomatic of China in many ways with the central government doing its best to cool the market and the net results are such that inter-bank borrowing rates are currently at 6.23% p.a.; bank reserves have gone up to 20.5% a......................

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