October 20, 2021
Markets

The real question about China for investors

The writer is director of China markets research at Rhodium Group

China’s crackdowns against the property sector and its technology giants have jolted financial markets, sparking a debate about whether or not China is still “investable”.

Longer-term bullish investors argue that Beijing’s commitments to economic growth and market liberalisation remain unchanged. They maintain recent actions such as tougher rules on property developer debt loads are efforts to reduce froth in the sector. Necessary adjustments in credit risk pricing will improve the functioning of China’s financial markets over time.

In contrast, bearish investors argue that under Xi Jinping China’s fundamental political objectives have changed and maintaining growth and liberalising capital markets are now less important to the country’s leadership than goals related to “common prosperity”. They…

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