TAIPEI, Taiwan -- China's economic slowdown may be scaring global markets, but some investment pros advise patience as the country undergoes a major transformation.
These experts point to what China's been saying for years: We're steering the economy away from high-cost factory work and toward more sustainable things such as consumption, tech and private investment in clean industry.
"You're talking about the whole way of raising capital," said Jack Perkowski, managing director of Beijing-based merchant bank JFP Holdings and a China investor for 20 years. He eventually expects a stronger role for China's private sector. "There are going to be periods of setbacks, so it will take a while. It won't always be pretty."
This view may be partly why most markets shrugged off China's announcement Tuesday of 6.9% economic growth last year, another notch down from the double-digit days. Many investors had also priced in the number, and there was optimism that China's government would offer more economic stimulus.
Although some suspect China's GDP figures are inflated, most doubters say the true number wouldn't be too far behind. Credible hard-landing theories are few. Premier Li Keqiang said in November growth would be around 6.5% annually through 2020.
These stalwarts aren't just letting their investments offshore weather China. They expect to make money from China itself, from defensive banking and telecom shares as well as newer stocks in Internet services.
Key Chinese Internet firms are Tencent (TCEHY) and Baidu (BIDU) . A flagship bank is the Industrial & Commercial Bank of China (IDCBY) . The country's chief mobile carrier China Mobile (CHL) leads its peers in 4G subscriptions.
"GDP has almost nothing to do with how well companies do," said Michael McGaughy, a personal investor working in the Hong Kong finance industry.
As evidence of lingering confidence, China's list of qualified foreign institutional investors has grown despite when stocks tumbled 40% in mid-2015. Their total quotas have steadily climbed since 2003 to $81 billion. Share prices on the benchmark Shanghai Composite Index are 10% higher now than five years ago.
Among the brave are the two Canadian pension funds that got licenses in December to trade stocks through a local currency scheme. In November a Swiss asset manager and a Portuguese insurer joined the 279 firms qualified to trade shares in foreign currency.
China investors would need a "trading mentality" to handle volatility by alternating defensive with growth stocks, said Nitin Dialdas, chief investment officer with Hong Kong-based fund manager Mandarin Capital.
Foreign direct investors also understand China's story because they see slow growth in slow motion and have learned to accommodate today's 6% to 7%.
"Those with businesses operating on the ground have a very good sense of China's twists and turns and they know their markets well," said Scott Kennedy, director with the Project on Chinese Business & Political Economy under the Center for Strategic & International Studies think tank.
Portfolio investors, he said, "are likely more skittish about recent developments and are more vulnerable to being affected by market psychology."