Investment manager AMP Capital Investors is looking to raise $330 million towards investing in Chinese A shares and bonds.
The firm announced plans to list a fund on the Australian Stock Exchange (ASX) before the end of the year that will allow institutional and retail investors access to Chinese stocks.
AMP Capital head of investments Shane Oliver said the best way to participate in the longer-term growth of China was through A shares.
"The Chinese growth story has a long way to go. It will be 30 to 40 years before China catches up to Australia in terms of per capita income," Oliver said.
"On average we estimate GDP growth in China of 8 per cent to 10 per cent per annum during that period."
Only those investment firms and banks with a Qualified Foreign Institutional Investor (QFII) licence are permitted to trade A shares and bonds on Chinese stock exchanges.
Those without a licence can only trade foreign denominated B shares or Hong Kong listed H shares, a much smaller investment universe.
AMP was the first Australian firm to be granted a licence by the Chinese Securities Regularity Commission in July.
It will initially enlist the help of two external managers with experience in Chinese A share investing to help with the firm's stock picking approach.
Oliver added there would inevitably be economic cycles along the way but now was an ideal time to invest in Chinese stocks because they were good value compared to the rest of the world.
"It was a bear market for [Chinese] A shares between 2001 and 2005. They were overvalued with P/E ratios of about 25 times and there was also uncertainty over their ownership," he said.
"But the ownership uncertainty has largely been resolved and valuations are down to about 13 to 14 times, which makes Chinese companies attractive in a global sense."
To date 48 foreign firms have been awarded QFII licences with the ability to invest in Yuan-denominated stocks and bonds.
QFII licence holders include Citigroup, HSBC, UBS, Nomura Securities, Deutsche Bank, Morgan Stanley, Goldman Sachs, JP Morgan and Merrill Lynch.
The QFII program was launched in November 2002.
