At some point this week, Nomura apparently cautioned those keen to pick the low in Chinese equities: It’s a “fool’s errand.”

I like the candor. And I agree with the characterization. The lows may well be in, but if they are it’s not because valuations are compelling. Neither have the fundamentals improved. If you’re bullish, it’s almost surely because you believe the Party’s determined to put a floor under the market.

To be sure, betting on the policy put is a tried and true strategy, but you can’t lose sight (not even for a minute) of the fact that the Chinese government doesn’t hold capital markets in the same esteem as policymakers in other locales. The Party’s desire to engineer a rebound in local equities stems from self-interest and political expediency, which in most cases (including this one) are the same thing.

Instability is abhorrent in Beijing and the notion that the government’s powerless to restore order anathema. The stock market (which is to say a manifestation of capitalism) as a source of domestic disharmony is repugnant to the point of being a non-starter. This is, after all, the Chinese Communist Party.

Ironically, then, Beijing’s increasingly farcical crusade to rescue stocks (which, accurately or not, are generally considered to be the quintessential instantiation of a free-market economy and a synonym for capitalism) is predicated primarily on the preservation of a social order whereby the populace, through various forms of perpetual pacification, is subjugated to the iron-fisted rule of a communist dictatorship. Does that seem like a good investment thesis to you?

That latter question isn’t entirely or necessarily rhetorical. The answer may well be “Yes!” Self-preservation is a helluva motive and autocrats are notoriously paranoid when it comes to problems with the potential to stoke social unrest. The issue with Xi Jinping, though, is that he’s demonstrated time and again a willingness to let stocks burn in the name of his social agenda. Sometimes, he seems to delight in the bonfire. It took three consecutive annual losses for Mainland equities before he took the situation any semblance of serious, where “serious” means he was able to be persuaded that intervention was necessary.

This week, both Mainland and Hong Kong equities notched outsized gains. Hong Kong-listed Chinese shares are up nearly 16% from the lows, which means a few more good sessions and the H-share benchmark will be a bull market.

Indeed, as Bloomberg noted Friday, the HSCEI is “the world’s best-performing primary gauge this month,” having logged three consecutive weeks of strong gains.

But what’s really changed? Certainly not the regime. Banks delivered a meaningless 25bps cut to the five-year LPR tenor, which might be helpful if mortgage rates weren’t already low. Pan Gongsheng’s pre-announced RRR cut earlier this month is just another example of working on the credit supply side when the problem’s demand. The presence of “The Butcher” at the CSRC and associated measures to ban or limit selling will probably help, but as compelling as “Nobody’s allowed to sell” might sound as a bull case, it’s plainly (comically) unsustainable.

Of course, Western policymakers (and those in Japan and Down Under too) likewise view supporting equity markets as a political imperative, and there was always something unnervingly paradoxical about the post-Lehman policy put: Central banks killed price discovery ostensibly in the name of saving markets. Market laws had to be suspended in 2008 in order to restore normal market functioning. And on and on.

Coming full circle, the Chinese policy put for equities is too overtly dictatorial to work in perpetuity. Every headline out of Chinese equity markets during acute selloffs is a punchline: “Xi’s ‘Butcher’ Chops Up Quants,” etc. If the Party’s open to suggestions, as they indicated this week, they could learn a little something about how to effectively pacify markets from the experts at the Fed, ECB and so on. With that in mind, I’ll leave you with a classic quote from the now-retired Aleksandar Kocic:

Power, in its traditional restrictive form, is an ineffective way of imposing a rule — its influence can be only temporary, it always encounters resistance. “Smart” power, one that aspires to be effective, cannot be restrictive; it must be permissive in order to eliminate a possibility of resistance. It should operate seductively and not repressively — it has to say “yes” more often than “no.” By the same token, smart power has to be a “good listener” calling on us to confide and share our preferences. Through their communication with the markets, central banks, and the Fed in particular, have become “good listeners” with their decisions and actions made with markets’ consent. After years of this dialogue, the markets have gradually surrendered to the ever shrinking menu of selections that converged to a binary option of either harvesting the carry or running a risk of gradually going out of business by resisting. Not much of a choice, really.