Therefore, the risk/reward ratio for Chinese equities is favourable. As the Chinese economy continue to mature and becoming more open, government policy changes and resultant volatility should be no surprise.
"Short term sell offs can create buying opportunities for long term investors. The long-term case for investing in China growth story remains intact", he adds.
As China is increasingly recognised as being a major driver of global growth, investors should consider having exposure to China when building a balanced portfolio, managers have urged.
Moreover, there are prospects for China starting to own more foreign stock.
China’s share of global equity markets is much smaller than its share of GDP, in contrast to other major economies and it is expected that over time this gap should close, and Chinese markets are likely to take up a significantly larger share of major equity benchmarks.
This will be both a boon for foreign exchanges - and another means of influence.
Yet according to the World Bank, while China represents nearly 18 per cent of world GDP, it only has 3 per cent of world market capitalisation - so its market has a long road ahead to deepen, mature and open up to more foreign investment.
Future prospects
Allan Cameron, investment director, Adam & Company Wealth Management, said with China now being the second largest economy in the world, it is "hard to ignore its growing global influence.
"China is also now the world's largest purchaser of commodities, and that will influence those exporting countries it does business with.
"But despite the current US/China tensions, China remains important globally for its well-established supply chains."
He agrees the region most affected by Chinese sentiment remains emerging markets, but with their growing exposure to global economies - for example, from commodity buying to manufacturing supply - he says "investors should have China (and not just the US) on their radars".
And, with close trading links and strong, established supply chains, China’s economic performance will continue to exert regional influence.
Rob Brewis, fund manager at Aubrey Capital Management, said it had not been easy for fund managers with exposure to China earlier this year.
He said: "This year started with a further relative decline, as China delivered what can best be described as a huge 'dummy', worthy of the best winger at the current rugby world cup, and Taiwanese technology had its AI moment in the sun. But we are now clawing this back steadily.
