China’s bulls stampede as recovery gathers strength
China's benchmark CSI 300 stockmarket index has gained 12% so far this year and is up by 32% since 23 March as the country's industrial and consumer recovery contnues.

China’s recovery is gathering strength, say Finbarr Bermingham and Amanda Lee in the South China Morning Post. Industrial production continues to lead the way, rising by 5.6% in August on a year before. There are also signs of a consumer rebound: retail sales advanced by 0.5% on the year in August, the first growth recorded this year.
China is the only big economy the International Monetary Fund thinks will expand this year. The encouraging economic backdrop means the bulls are out in force. The benchmark CSI 300 stock market index has gained 12% so far this year and is up by 32% since 23 March.
The rally has brought plenty of signs of excess. Shares on the Star market, a technology-focused equivalent to America’s Nasdaq, have been trading at “huge premiums” to “near-identical” stocks listed in Hong Kong, says Xie Yu in The Wall Street Journal. The fact that local investors are willing to pay up to five times as much as offshore buyers for the same assets suggests a speculative frenzy. However, regulators intervened to cool excesses over the summer, with the CSI 300 now off 3% from a mid-July high. The Star market froth makes more sense than you think, says Shuli Ren on Bloomberg. Too often foreign investors think China is “just another growing emerging market” with a rising middle class.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
That prompts them to buy into consumer stocks such as Luckin Coffee (which later turned out to be a fraud). Locals, by contrast, know that nothing is as solid as a sector that has almost unconditional government backing: pricey technology firms. Chinese markets are driven by retail investors and can provide a wild ride. But authorities tend to step in if they fall too far. In a lousy year for the global economy, China’s markets are a rare bright spot.
-
Trust in US TIPS to beat inflation
In an inflationary market TIPS, the US Treasury Inflation-Protected Securities are most compelling says Cris Sholto Heaton.
By Cris Sholto Heaton Published
-
The jury's out on the AI summit at Bletchley Park
World governments gathered for an AI summit at Bletchley Park in November, but were they too focused on threats at the expense of economic benefits?
By Simon Wilson Published
-
Trust in US TIPS to beat inflation
In an inflationary market TIPS, the US Treasury Inflation-Protected Securities are most compelling says Cris Sholto Heaton.
By Cris Sholto Heaton Published
-
What is Vix – the fear index?
What is Vix? We explain how the fear index could guide your investment decisions.
By Dr Matthew Partridge Published
-
Time to invest in the next agricultural revolution
As the global demand for food increases, food producers are seeking to lower their carbon emissions. Technology will help meet both goals.
By Dr Matthew Partridge Published
-
Asia’s hidden gems: Three undervalued Asian stocks
Personal View Fidelity's Nitin Bajaj highlights three favourite Asian stocks.
By Nitin Bajaj Published
-
Uber's switch to profitability is an opportunity for investors
The ride-hailing platform has just reported its first operating profit and its future looks bright.
By Stephen Connolly Published
-
The bond bust bodes well for equities
Rising yields on government debt herald the end of the free-money era and good news for investors.
By Max King Published
-
Japan is back: Three Japanese stocks to ride the rebound
Personal View A professional investor tells MoneyWeek where he’d put his money. Nicholas Price highlights three favourites.
By Nicholas Price Published
-
Vietnam, Asia’s new tiger economy, is roaring. Investors take note.
Just two decades ago, Vietnam was one of the world’s poorest nations. Now it is a thriving regional hub with ample scope for further rapid development.
By Alex Rankine Last updated