Investing for China’s next phase

WHEN it comes to China, the market sometimes has a short memory and an even shorter attention span. Even so, China’s recent bull market probably prompted a few mental U-turns among those who not so long ago were asking “Is China investible?”

I took a different view back in October, when the Communist Party Congress put Xi Jinping on track for an unprecedented third five-year term in office and Chinese equities plunged. Many investors saw his appointment as anti-growth, and that the tailrisks for China had become the baseline.

My colleagues and I saw it instead as the start of a new phase; with the domestic politics settled, the leadership could focus more on boosting the economy. We also anticipated the relaxation of China’s zero-Covid policies – even if the speed with which those were abandoned came as a surprise.