From the perspective of Bank of Singapore’s chief economist Mansoor Mohi-uddin, the unbalanced focus in favour of security issues rather than economic fears, and China’s directionless take on its zero-Covid policy, have created greater pessimism in the space.
Following China’s 20th National Party Congress, President Xi Jinping’s consolidation of power is clear. What is less so, at least from the perspective of investors, is how the government of the world’s second largest economy will henceforth deal with burgeoning issues ranging from its strict Covid policy to the ailing property sector.
Stock markets in mainland China and Hong Kong have fallen sharply in the days following the conclusion of the meeting. Shares of companies based in mainland China and Hong Kong, and traded elsewhere, such as the US and Singapore, lost ground too, as investors fret over the perceived reduced checks and balances among China’s leadership, with many assuming further introduction of policies not deemed friendly to the markets.
