A large investment bank avoids Chinese stocks but buys its bonds.

JP Morgan’s Joyce Chang believes that regulatory crackdowns in the country will tighten, putting downward pressure on large market groups and industries.

“We really recommended it [investors] to be left out for the time being, “the company’s chairman of global research told CNBC’s” Trading Nation “on Thursday.

Chang believes China will be actively targeting businesses in waves, and the final one could be a few more months away. The regulatory activity is part of its “common prosperity” which is focused on consumer and social welfare.

“Those are the buzzwords, and many of those goals are goals for 2035,” she said. “There is reason to be careful here.”

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This week, Beijing regulators called the ride-hailing apps Didi Global and Meituan for non-compliant behavior. Didi is 37% behind over the past three months while Meituan is down 19%.

China is also looking for more control over its publicly traded stocks. The country’s president, Xi Jinping, wants a stock exchange for small and medium-sized companies in Beijing.

“China has made it very clear that it still wants capital, but it wants it on its terms and on its stock exchanges,” added Chang.

Despite her short-term negativity for the stocks, Chang is a long-term China bull, claiming the country is massively understaffed by global investors. She believes buying its bonds is a strategic way to participate in economic growth while limiting the downside risk associated with regulatory crackdowns.

“The best way to play China right now is actually plain vanilla in the bond market,” said Chang. “Chinese government bonds still have very attractive returns compared to the rest of the world.”

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