Investors in Chinese stocks trading on the mainland, Hong Kong and the United States hit a particularly rough patch in 2021. Share prices plunged in Hong Kong last year, as investor confidence in China’s technology and property sectors were undermined by one bad news after another – from regulatory crackdowns on Big Tech to the financial distress at highly leveraged mainland property developers . By comparison, the rally in US stocks last year saw the Dow Jones Industrial Average gain 20 per cent and the S&P 500 rise 30 per cent. In 2022, investors in Chinese stocks could very well reverse their fortunes. China assets are predicted to offer stability this year amid predictions that the US Federal Reserve will raise interest rates earlier than previously anticipated , which could put a halt to the US stock rally. Elon Musk , chief executive at Tesla and Space Exploration Technologies Corp , has forecast the next economic recession to come “around spring or summer 2022, but not later than 2023”. That means investors must seek new safe havens. After a tumultuous 2021, it seems that China’s growth story is poised to make a comeback in 2022 and reward investors who see it as a safe bet. Chinese authorities have already made it clear that this year’s focus will be on maintaining economic stability, while pursuing reforms. Beijing is expected to limit instances of job cuts, economic downswings or other domestic disruptions this year, when the Chinese Communist Party will conduct its 20th National Congress . This meeting, which is held every five years, will take place in the second half of this year. There is little doubt that Beijing will do whatever it can to put a floor beneath economic growth. The recent decision by the country’s central bank, the People’s Bank of China , to pump money and lower interest rates show that pro-growth policy measures are being rolled out. While China’s target growth rate of 5 per cent to 5.5 per cent in 2022 is down from last year’s 6 per cent increase, that would still be attractive compared to the anticipated downturn in the US over the coming quarters. Alibaba, JD.com aid Hong Kong stock rally as manufacturing in China expands Meanwhile, there is a slice of truth from this humorous take: since China stocks have dropped sharply the past year, any further slump is naturally going to be limited. Using that the same logic: if a property developer’s bond is traded at a fraction of its face value, this could provide an opportunity for extraordinary returns. That is, so long as the developer does not file for bankruptcy. There are long-term risks that continue to weigh on the value of China assets. These include trade disputes between Washington and Beijing, a slowdown in China’s economic growth, and tensions between private businesses and increasingly intrusive regulators. Still, those risks are unlikely to exacerbate significantly in 2022.