Optimism surrounding China’s emergence from its stringent zero-Covid policy and lockdowns has all but fizzled out. Chinese stocks have given up a good percentage of gains from last year’s reopening rally — which peaked in January 2023 — and analysts and fund managers are souring on the market’s short- and medium-term prospects.
Notably, the Hang Seng Index and Nasdaq Golden Dragon China Index (comprising China-based stocks listed in the US) have underperformed the Shanghai Composite Index (see Chart 1).
