Despite a slowing economy, China's stock market has emerged as one of the best places in Asia to invest in due to its "very, very attractive" valuation, according to global investment house Fidelity International.
There have been more and more signs of a slowdown in China's economy, which is the largest in Asia and second-biggest globally. The country has been embroiled in a trade fight with the U.S., which contributed to the more than 24 percent plunge in Chinese shares last year — their worst performance in a decade.
But when asked where is the safest place to put money in, Medha Samant, investment director for Asian equities at Fidelity International, replied: "It's really north Asia, it's being led by China, we think."
Samant told CNBC's "Squawk Box" on Friday that Chinese stock valuations are looking "very, very attractive right now."
"What matters to us as active investors is ... what's happening on the ground in China," she said, adding that measures taken by Chinese authorities in recent months to support the economy have helped to raise to the attractiveness of Chinese stocks. Some of these measures include tax cuts and reduction in the amount that banks must hold as reserves.
Fidelity's sector picks
Samant said she likes stocks in the new economy, as well as the consumer and healthcare sectors. Her choice picks also include "very select old economy assets" for their value and potential for yield, she said.
Even though "the outlook is definitely more positive," Samant said she acknowledges that there are still headwinds facing the Chinese economy. So, investors should be selective, she added.
"There are these other headwinds which are impacting sentiment, which means that there could very well be stocks pulling back ... in certain areas of the market," she said. "Is it time to go in and be a big buyer? Well, you got to be selective, it comes back to that. Look for areas that still make sense fundamentally and (where) valuation has come down."
Slowing China growth
China's tariff fight with the U.S. has dragged on for months, adding to concerns that the Chinese economy would slow down more than expected. China is expected to grow around 6 percent this year, down from 2018's official target of 6.5 percent, said Frederic Neumann, co-head of Asian economics research at HSBC.
The Chinese economy needs more support from authorities, but the "rumored" official growth target range of 6 to 6.5 percent is "still a fairly decent outcome," Neumann told CNBC's "Squawk Box" on Friday.
"The problem at the moment is the market is worried about a weaker outcome than that. China has to signal clearly that they've put a floor on the growth. Once they do that, I think we all can breathe a little bit easier," he said.
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