Those changes have benefited some companies. As a result, earnings of Chinese companies have done better than expected, said Tan.
"If you look at the third-quarter reporting season, overall earnings growth is closer to about 10% year-on-year growth, which is an acceleration in the second quarter which is about 5%," she said. "We think that Chinese stock market continues to have a lot of interesting opportunities that one can pursue."In a 2020 outlook report released on Wednesday, UBS said it likes stocks of Chinese internet companies and businesses in the 5G smartphone supply chain.
Without naming specific stocks, the wealth manager said "share prices of Chinese internet companies have been mixed this year, weighed down by heavy investments in new growth areas like video, cloud, payments and expansion to low-tier cities." But some of those investments could start to deliver better profits and margins in the coming year, it added.
"So driven by improving profitability and margins in new growth segments ... we expect earnings growth to accelerate for the Chinese internet sector in 2020 after two years of challenging conditions," said UBS.