HostPlus, the A$7.5 billion ($6.2 billion) superannuation fund covering Australia's hospitality, catering and entertainment industries, has sent its board of directors on a two-week trip to China.

Sam Sicilia, CIO at the Melbourne-based pension fund, led the nine-strong delegation that met with government officials, business leaders and asset managers.

He says HostPlus has received a number of offers from its existing external fund managers to do projects in China, but the different legal environment has been too much of a worry. Moreover, like many other Australian or global investors, HostPlus has been able to access the China story simply by investing in the stock of Australian companies whose growth is tied to China's, such as mining concerns.

But the growth of China as an investment story prompted the board's trip. Over the past decade, Sicilia reckons an Australian investor would have received a better risk-adjusted return from investing in domestic equities with China exposure than in direct China investments, which are more volatile. But that may not be true for the next 10 years.

"Do the same Western balance sheet calculations work in China?" Sicilia wonders. He says that financial practice isn't like physics: the laws are mutable. So in theory, adjusting the usual checklists one would conduct on an investment outsourcing can be done for China.

This is one conclusion he and the board have reached since their visit -- but how the theory can be implemented has yet to be determined. "We need to do more work on what we can accept in order to pass the 'sleep at night' test," Sicilia notes.

Another purpose of the trip was to help the board face any unconscious preconceptions about China. "In any other major market, we have faith in the legal system and in the fiduciary trust given to our external managers. We needed to test the myths in our heads about China." That also meant clarifying some of the disaster stories that leak out of foreign dealings in China, and putting them into context.

Sicilia says the trip is not an affirmation that HostPlus will invest in China. "It's possible that we will not go in," he says. However the journey has given the superannuation fund some starting ideas about what is required if it does want to consider an investment.

First, it needs a trusted partner from among its existing business relationships. Because HostPlus doesn't know people in China, it would not enter a local relationship.

Second, it needs to remain cautious. Given the long-term nature of a superfund's open-ended lifespan, Sicilia says it can be patient. "We should not be rushed, even if that means missing the China story," he says. "There are a lot of other stories out there."

But the third lesson the board learned was contradictory. "You ignore China at your peril," notes Ken Marshman, chair and head of investment outcomes at Jana Investment Advisors, an investment consultancy in Melbourne; Marshman also sits on HostPlus' board.

"China will become such a dominant part of the investing landscape, you need to know more about it, even without any money directly invested there," Marshman says.