International investors are ramping up their investments in China's equity markets, buoyed by optimism over new economic policies aimed at stimulating growth and recovery. Global media reports suggest a significant shift in sentiment, with many seeing China's latest measures as a catalyst for economic resurgence.
Global hedge funds are pouring money into Chinese stocks at unprecedented levels. Bloomberg reported that firms such as U.S.-based Mount Lucas Management, Singapore's GAO Capital, and South Korea's Timefolio Asset Management are among those taking bullish positions on the Chinese markets.
During China's recent seven-day National Day holiday, when domestic stock markets were closed, Chinese-related exchange-traded funds (ETFs) in Tokyo hit record highs last Friday. This surge reflects growing confidence among Japanese investors in China's stimulus efforts, according to Nikkei Asia.
Since the September meeting of the Political Bureau of the Communist Party of China Central Committee, which introduced additional economic measures, Goldman Sachs has issued a series of positive reports on the Chinese stock market. The investment bank upgraded its rating on Chinese stocks to "overweight," as reported by Bloomberg.
"A massive move in a short amount of time for the world's second-largest economy is going to have ripple effects lifting all emerging markets," Will McGough, Director of Investments at Prime Capital Financial, told Forbes, referring to China's stimulus measures.
The measures have already lifted Chinese indexes and currency, as well as European luxury stocks, global miners, and commodity prices. The Wall Street Journal noted that China's next moves in the coming months could be crucial in determining the long-term direction of its economy.
At a press conference on Tuesday, Zheng Shanjie, head of the National Development and Reform Commission, outlined a series of actions to further boost the economy. A key announcement was that investment projects worth 200 billion yuan (approximately $14.14 billion) planned for next year will be advanced to this year. This move aims to support local governments in accelerating preliminary work and construction.
Think tank China Finance 40 Forum commented that the government's plan to front-load the 200 billion yuan could drive a significant uptick in economic growth in the fourth quarter and help China achieve its annual target of five percent GDP growth.
