China: Transitioning to a brave new world

CHINA'S equity markets have been roiled by a combination of concerns in recent weeks, culminating in the fallout from the Archegos family office liquidations in late March.

However, this volatility has retraced only a portion of the 90 per cent rise in MSCI China since the lows touched in March 2020, and is inconsistent with the transition to outright economic expansion that China's economy has witnessed recently.

Indeed, while concern that recent moves by Chinese authorities to tighten lending growth raises concerns that China's economy may have reached its post-pandemic peak, we believe that China's situation today is quite different from that in 2010-11.