In 2022, the Chinese authorities abruptly abandoned their now infamous zero Covid policy, following widespread protests across the country. The markets greeted this development with acclaim – equities rose aggressively as investors around the world bet on a consumer spending boom. The assumption was that consumers with excess savings would now go on a spending binge. Portfolio inflows towards China from abroad surged. In the first six weeks of 2023, well over $20 billion was allocated towards Chinese equity and bond markets – which gives some idea of the huge change in sentiment towards the Chinese equity market. Bear in…

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