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News analysis
China: Pricing out the ‘uninvestable’ risk?
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China’s economic model has undergone repeated reinventions over the past quarter-century.
PHOTO: AFP
Follow topic:
- China's equities have rallied 38 per cent this year, driven by PE multiple expansion, hinging on its techno-industrial advancement.
- Industrial upgrades, capital reforms, and liquidity momentum are propelling China's growth, with tech sector earnings projected to surge.
- Systemic issues like industry competition and US-China relations pose risks, but China's transition and reforms offer optimism.
AI generated
SINGAPORE - While it is not the holiday season just yet, investors in Chinese equities have had much reason to celebrate. MSCI China has staged a stunning 38 per cent rally year to date – more than double the gain in the S&P 500.
For those who recall the market’s past booms and busts, the question at hand is whether this surge can endure, especially as it has been fuelled by price-to-earnings multiple expansion so far, rather than earnings growth.
