I have just returned from a visit to Hong Kong and southern China. This exciting part of the world, as ever, blew me away with its energy.

In particular, I visited Shenzhen for the first time. This is a city of more than 10 million people which 35 years ago was no more than a village nestled on the border with Hong Kong’s New Territories.

That was when then President Deng Xiaoping decided to drag China out of the wreckage of his country’s disastrous Cultural Revolution. He set China on a remarkable path towards modernity in 1978, a journey that continues today.
Shenzhen is a remarkable place – one of China’s biggest ports and home to some of its most innovative technology companies.

One that I visited is a company that most people in the UK will not even have heard of let alone know anything about. Yet Tencent is an internet company to rival any of the biggest in the West, a Chinese Yahoo or Google.

On my visit, I was shown a screen which highlighted the current location of each of the 150 million or so Chinese who at that moment were logged on to its instant messaging service. That’s about a quarter of the 600 million or so internet connected people in China.

The potential growth for this company is breathtaking. It is just one example of the vibrant private companies that are dragging China from an export and investment led economy to one that will be driven forward by higher domestic consumption as the country rebalances itself.

An important step on the road to the new China was taken while I was in the country. That step was the publication of a set of reforms, introduced by a government under new President Xi Jinping which sees itself as the heir to Deng Xiaoping’s revolutionary administration.

China has been enormously successful as the workshop of the world over the past 35 years. To continue its miracle it needs to move to a different level. And that will require fundamental reforms.

The measures outlined by Xi’s government include some symbolically important changes. Most eye-catching of these is the abolition of China’s hated one-child policy. This by itself could have an enormous impact, both socially and economically too.

Other measures include further steps towards a genuinely market-driven economy where state owned companies are no longer cossetted by the government via subsidised interest rates and cushy loans.

Just as Deng tested out new policies in the area around Shenzhen in the 1970s before rolling them out across the country, Xi Jinping has launched a new Free Trade Zone in Shanghai, described to me while in China as a kind of petri dish for experimenting with new economic ideas.

Will all this translate into better returns for investors in China? It has been a disappointing place for those hoping to tap into the amazing economic growth story in recent years.

It is impossible to tell what the impact of these reforms will turn out to be or when they will be felt. But what is for sure is that the recent underperformance of the Chinese market has left it one of the cheapest in the world.

There is no better time to consider investing in a market than when no-one else is interested. And that is largely the case today in China.

Tom Stevenson is an investment director at Fidelity Worldwide Investment