A-Shares vs H-Shares vs ADRs: Which Chinese Stocks Should You Buy?
Understanding the 3 ways to invest in Chinese companies—and which one is best for you as a foreign investor.
If you’re interested in Chinese equities, you’ve probably seen tickers like 600519.SS, 0939.HK, and BABA—and wondered: What’s the difference? Are they the same company? Which should I buy?
The answer isn’t just about price—it’s about structure, regulation, currency, risk, and access.
As a foreign investor, you have three main paths to own Chinese stocks:
- A-shares – Listed in Shanghai/Shenzhen (onshore China)
- H-shares – Listed in Hong Kong (offshore, but mainland-incorporated)
- ADRs – Listed in New York or other Western exchanges (American Depositary Receipts)
Each has distinct advantages and trade-offs. Let’s break them down—so you can make smarter allocation decisions.
📊 Quick Comparison at a Glance
| Feature | A-Shares | H-Shares | ADRs |
|---|---|---|---|
| Where Listed | Shanghai / Shenzhen (Mainland China) | Hong Kong Stock Exchange | NYSE / NASDAQ (U.S.) |
| Currency | Renminbi (RMB/CNY) | Hong Kong Dollar (HKD) | U.S. Dollar (USD) |
| Who Can Buy | Foreigners via Stock Connect | Open to all global investors | Open to all global investors |
| Tax on Dividends | 10% withholding tax | 10% withholding tax | 10% withholding tax |
| Capital Gains Tax | None (for foreigners) | None | None (for non-U.S. persons) |
| Settlement | T+1 | T+2 | T+2 |
| Regulation | CSRC (China) | HK SFC (Hong Kong) | SEC (U.S.) + home jurisdiction |
| Liquidity | High (domestic-driven) | Moderate to high | Varies (some low volume) |
| Example: China Construction Bank | 601939.SS | 0939.HK | CCBFY (OTC) |
💡 Many large Chinese companies—like Ping An, CCB, or PetroChina—have both A- and H-share listings. But they often trade at different prices!
1. A-Shares: The “Real” Onshore Market
What They Are
Stocks of Chinese companies incorporated and listed in mainland China, traded in RMB on the Shanghai or Shenzhen exchanges.
Pros
✅ Direct exposure to China’s domestic economy and retail investor sentiment
✅ Often higher valuations (due to local demand)
✅ Access to companies not listed overseas (e.g., Kweichow Moutai, CATL, Wuliangye)
Cons
⚠️ Harder to access: Only via Stock Connect through select brokers
⚠️ Trading hours: Limited to Beijing time (9:30–11:30 & 13:00–15:00 GMT+8)
⚠️ Less familiar governance for Western investors
Best For
Long-term investors who want pure China exposure and are comfortable using platforms like Interactive Brokers or Moomoo.
2. H-Shares: The Hong Kong Gateway
What They Are
Shares of mainland-incorporated Chinese companies listed in Hong Kong in HKD. Issued specifically for offshore investors.
Examples:
- China Mobile (0941.HK)
- Industrial and Commercial Bank of China (1398.HK)
- BYD Company (1211.HK)
Pros
✅ Easy access: Tradeable via almost any international broker
✅ Strong regulatory oversight under Hong Kong law
✅ Often cheaper than A-shares (same company, lower P/E)
Cons
⚠️ Not all Chinese giants are here (e.g., no Moutai, no CATL)
⚠️ Sensitive to HK market sentiment (can diverge from mainland performance)
Best For
Investors seeking blue-chip China exposure with simplicity and liquidity—ideal for core portfolio holdings.
3. ADRs: The U.S. Route (With Caveats)
What They Are
American Depositary Receipts—certificates issued by U.S. banks representing shares in a foreign company. Traded in USD on U.S. exchanges.
Examples:
- Alibaba (BABA)
- JD.com (JD)
- Pinduoduo (PDD)
Note: Most Chinese ADRs are not actual shares—they’re variable interest entities (VIEs), a legal structure that gives economic exposure but not direct equity ownership.
Pros
✅ Trade in USD during U.S. hours
✅ Familiar platform (Schwab, Fidelity, etc.)
✅ High liquidity for major names
Cons
⚠️ VIE risk: You don’t legally own the underlying company
⚠️ Delisting threat: U.S.-China audit disputes could force removal from NYSE/NASDAQ
⚠️ Many top firms aren’t listed (e.g., Tencent, Meituan, Moutai have no ADRs)
Best For
U.S.-based investors who want convenience and familiarity—but should limit ADRs to a satellite portion of their China allocation.
🔍 Real Example: China Construction Bank (CCB)
| Type | Ticker | Price (approx.) | P/E Ratio | Dividend Yield |
|---|---|---|---|---|
| A-share | 601939.SS | ¥6.20 | 5.2x | 6.5% |
| H-share | 0939.HK | HK$5.80 (~¥5.40) | 4.1x | 7.8% |
| ADR | CCBFY (OTC) | $0.80 | N/A | Low liquidity |
→ The H-share trades at a discount, offers higher yield, and is easier to buy—making it attractive for income-focused foreigners.
🎯 So… Which Should You Buy?
Ask yourself:
| Your Goal | Best Choice |
|---|---|
| “I want the most authentic China exposure” | → A-shares (via Stock Connect) |
| “I want simplicity, safety, and dividends” | → H-shares |
| “I’m in the U.S. and just want quick access” | → ADRs (but keep position small) |
| “I want full diversification” | → Mix all three based on availability and valuation |
💡 Pro tip: Compare A/H share price ratios. When the gap widens (e.g., A-share trades 30% above H-share), the H-share may offer better value for the same company.
Final Thought
There’s no “best” type—only the best fit for your situation.
- A-shares = Depth and authenticity
- H-shares = Balance and accessibility
- ADRs = Convenience with caveats
By understanding these differences, you move from guessing to strategic investing in the world’s second-largest equity market.
🔗 Next Step:
Not sure how to buy A-shares? See our guide: [“Top 4 Brokers That Let Foreigners Invest in China A-Shares”]
Want real-time A/H premium data? Try HKEX A/H Share Premium Index
Disclaimer: This article is for educational purposes only. Investing in Chinese equities involves unique risks, including regulatory, currency, and geopolitical factors. Past performance is not indicative of future results. Consult a qualified advisor before making investment decisions.