Consensus on China too negative as stock bulls embrace Beijing ‘course correction’, US fund strategist and ex-diplomat says
- President Xi Jinping has belatedly corrected course after a disastrous execution of ‘common prosperity’ policy, a strategist at US money manager Matthews says
- Policy course correction ‘is more likely to improve corporate and consumer confidence than any traditional stimulus’
That is the opinion of Andy Rothman, an investment strategist at Matthews International Capital Management, a US money manager overseeing US$12.3 billion of assets worldwide.
“What I got wrong was that it has taken more than a couple of quarters for [President Xi Jinping] to acknowledge the disastrous execution of his ‘common prosperity’ campaign and to course correct,” Rothman said in a note published on the firm’s website. “We finally saw that in July.”
The CSI 300 Index tracking the largest onshore companies listed in Shanghai and Shenzhen jumped 4.5 per cent last month, the best rally since January. The Politburo on August 24 said it would support private businesses, sparking a sharp recovery in onshore stocks. Foreign funds responded by buying US$4.8 billion of Chinese onshore equities last week, according to Stock Connect data.
Rothman joined Matthews in San Francisco in 2014. He worked for 17 years in the US Foreign Service with a career focused on China, including as head of the macroeconomics and domestic policy office of the US embassy in Beijing. He has lived and worked in China for more than 20 years, including as a student in 1980.
