Is it ok to invest in Chinese stocks?

[matt1985]

I’m thinking of buying a chinese telecom stock and maybe a chinese search engine at some point. I manage my own money via an online broker. I was just wondering if would be a sin to own a chinese stock because of human rights violations there.

I’ve taken up trading stocks as a hobby, I changed my major from psychology to business after becoming intrested in the stock market after watching Mad Money w/ Jim Cramer and Mad Money. I honestly wouldn’t say I did it for the money because I find psych to be very boring. I really hope to have a career working with stocks because I feel I’m good at it based on my returns and I love it. I’m not open to investing in mutual funds because I feel I can do fine managing my own money.

As for what I can find about catholic investing principals I can’t seem to find any that give me a black and white picture of what stocks a catholic can and can not own. I don’t own any biotech stocks or bigpharma. I mean, I deffinatly won’t own a pharma company that violates church teaching on life issues. But there are some stocks that I’m drawn to like casino stocks,chinese stocks and taser which cause me concern.

Thanks for your help

 

[Yerusalyim]

Tough question. I suppose it would be a matter of knowing what exactly the company’s record is. One can make the case that as China becomes more of a market economy tied to the rest of the world the more their human rights record comes under scrutiny and improves. Talk to someone in the chancery who is both spiritually sound and knowledgeable on finances…and pray.

 

[BobP123]

If they’re not a threat to your Catholic faith or moral values, there should be no problem. Just as you would do with U.S. stocks. All U.S. companies would not conform to our moral standards, either.

Consider also that China has the second highest U.S. Treasury holdings in the world. Chances are the guy you know who managed to get financing for his new house has China to thank for his low interest rates.

 

[gardenswithkids]

…As for what I can find about catholic investing principals I can’t seem to find any that give me a black and white picture of what stocks a catholic can and can not own. …

I don’t think the Church gives such a black and white answers on what stocks we can buy in the stock market. But the fact that you care enough to pose the question means you have some inclination that Chineses stocks may not be the right place to put your money.

Investors may not be able to know everything about every company that they invest in, but if we have serious reasons to suspect a company violates moral principles and human dignity, why invest your money there?

Beyond any possible remote culpability for your investments, I don’t think it’s good business or investment strategy to buy stock in companies that violate human rights. The recent recalls of Chinese products makes me wonder: if they don’t value the humans that work for them, why would we expect them to value the humans that purchase their goods or the humans who invest in their companies?

Personally, I don’t want my money invested in Chinese stocks specifically because of their human rights issues in that country. Maybe not every Chinese company violates human rights, but I don’t have enough time or other resources to discover which companies do and don’t. I recently discussed this very situation with an investment manager. He brought up several other nations that offer similar growth opportunities for investments without the known human rights violations.

 

[matt1985]

Thanks for your advice. Investing sure is daunting and I understand that almost every company will have some ties to China with globalization. But for now, I think I will stick with companies that are not directly owned by the Chinese government.

I know Petro China is probably the worst Chinese stock because of it’s assets in Sudan. A lot of groups are divesting from it. So keep that in mind.