who were bullish would have expected an acknowledgement of the challenges for China property from the authorities, which has not come.
Their propensity to risk growth for longer than market partici- pants thought they would in the interests of social stability was meaningful.
The next trigger point was supposed to be post the Winter Olympics, but we are yet to see anything. That is a big part of the global economy, which is continuing to pursue a zero Covid strategy.
There is a healthy dose of humility that comes with that. We have no idea what is going on in Putin’s mind and who, hand on heart, knows what is happening in the power channels of China? Clissold: For me, China is a developed market. Evans: The quality of information you get on Chinese stocks is more like a traditional emerging market. I agree that the
underlying economy makes it a developed market, but can you trust what they are saying? Freedman: Developed market rates will react to China’s growth. They need to back state-owned enterprises to help support the real estate sector, which is important for China’s citizens. It is hard to imagine that they will let too much more pain happen. Nash: The trick to getting last year right was understanding that China slowed from March onwards. We never have the data and tend to see what is happening in pricing after the event. Last year China did too much in terms of reform and fiscal tightening. Everyone has this period wrong in terms of policy- makers, but they really got it wrong with China. But they are reversing things and we are seeing that in the pric- ing. The data in Asia is looking better, currencies are picking up and you are seeing it in credit numbers. If they have turned, you have to take note.
April 2022 portfolio institutional roundtable: Fixed Income
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