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In China, The Onslaught Continues
"Even more complicated and grim."
That's how the Politburo characterized the external environment at a meeting chaired by Xi Jinping.
The Party was alluding to the pandemic, apparently, but the assessment could easily double as an oblique reference to international relations. None of the headlines out of China Friday screamed "cooperation" or otherwise suggested the "Cold War 2.0" meme can be retired.
More immediately germane (if you're a market participant anyway), China described the world
Add to this the story of Sun Dawu, an agriculture tycoon (of and for the people) recently sentenced to 18 years in Xi’s prison.
Crimes against “The Party”.
Just another version of the same old story.
Feels like there is a sense of denial or disbelief that any government would decide on a strategy in which profit maximization is not job 1, and through that lens more or less believes the worst of market impact in CQQQ is done, which may or may not be correct but on the margin seems slightly naive. While the National Team maybe be used to moderate the volatility the direction of travel looks clear and it may take a while for that to sink in for many investors as it is noted than Northbound flows remain strong as it does for many of the China linked ETFs listed in the US. Not sure this is a buy-the-dip situation. Although that is not to say that there is not a sharp rebound coming in the weeks ahead. I am just finding it a little hard to trust. And that lack of trust that many have might just be the reason for higher risk premium in Chinese assets to be a semi-permanent feature.