Stray Reflections Navigating China’s Bull Market
Oct 6, 2025
Kaiwen Wang, Chief Strategist at Clocktower Group, shares his insights on navigating China's complex market landscape. He discusses the importance of focusing on Beijing's policy shifts and the implications of fiscal austerity on the market. The conversation highlights why equity returns lag behind GDP and the fragility of the current rally, driven by domestic liquidity and FOMO among retail investors. Kaiwen also explores the need for a revival in consumption to sustain market momentum and draws parallels with Japan's late-1990s economic experience.
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Think China As A Policy-Driven Market
- China functions economically like market economies; remove political bias when judging its markets.
- Beijing's micro policy choices drive Chinese market performance more than geopolitics.
Austerity Over Bailouts Explains Slow Stimulus
- Beijing prioritized fiscal and monetary austerity after crises to avoid moral hazard.
- That restraint explains years of weak stimulus and helps explain delayed household relief.
Earnings, Not Just Multiples, Must Recover
- A sustainable Chinese bull market needs real earnings recovery, not just multiple expansion.
- That requires forceful monetary and fiscal reflation and a property market floor.