China's Stock Market May Be Supercharged by a Growing Bullish Crowd

There Is Still Disagreement Among Investors About When the Best Time Is To Re-enter the Chinese Stock Market, After a Period Of Volatility Caused By Concerns About Government Regulation.

Some believe that now is a good time to take a strategic approach, while others remain cautious about the possibility of further disruptions.

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As we approach China's Lunar New Year holiday next week, there has been a lot of discussion about the country's economic data, which has been better than expected. This has led to speculation that consumer spending may increase in the coming weeks.

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Assuming that the upcoming Year of the Rabbit celebrations don't change the trajectory for Covid, China optimists may soon be placing their bets.
Here's a summary of the key developments in China's markets this week.
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Vice Premier Liu He struck an optimistic tone at Davos, saying that China's economy would rebound to its pre-Covid growth trend this year. December data for retail sales and industrial output was far better than forecast, showing that the economy is resilient even as the Covid Zero exit wave spreads throughout the country.
China's population shrank in 2022 for the first time since the 1960s, due in large part to the fewest births in more than 70 years. This trend is a threat to China's economic growth, which has been predicated on a vast labor supply. India may have already surpassed its neighbor as the world's most populous nation.

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Dutch and Japanese export controls to China may be finalized as soon as this month. The restrictions on the sale of semiconductor equipment are unlikely to be as tight as those planned by the Biden administration, but they will still see China further cut off from the tech and know-how needed to build the most advanced chips.
China Evergrande Group has been in talks with creditors about restructuring proposals, including two options for extending payment deadlines on unsecured offshore debt. However, the company's auditor PwC has resigned due to disagreements over the developer's (still unpublished) 2021 financial statement.

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WallStreetBets idol Ryan Cohen has taken an activist stake in Alibaba Group Holding Ltd. and is pushing for more shareholder rewards. Cohen’s sway over the board will, however, be limited by the Chinese government’s golden shares. Alibaba co-founder Jack Ma has landed in Hong Kong, an appearance the market has taken positively.
Didi Global Inc.'s ride-hailing app has reappeared in Chinese app stores, allowing the company to bring in new users for the first time since Beijing punished it with a ban in July 2021. The company will soon face a new competitor in the form of a state-launched app for public employees called "Strong Nation Transport."

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China's home prices have been falling for 16 months now, making it the longest downturn in history. This is despite the fact that policy makers have unveiled a number of plans to revive the market. Most recently, they have announced a plan to channel cheap loans to developers via bad-debt managers like China Huarong Asset Management Co.

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Citigroup's chart shows that the company's stock price has been on a steady decline over the past year.