Investors watch a computer screen showing stock price data in the stock exchange hall.
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2024 has passed and the world is still worried about China.
From real estate woes to lackluster economic data, China appears to be suffering from a prolonged coronavirus pandemic. The country is still reeling from the massive lockdowns that began in 2020, with weak GDP, a struggling stock market and high unemployment, dashing hopes for a quick post-pandemic rebound.
But amid all the uncertainty, this gloom-and-doom perspective isn’t shared by all market thinkers.
Ted Alexander, chief information officer of BML Funds, said in an interview with CNBC’s “Street Signs”: “Everyone is pessimistic about China. I doubt that there will be unintended negative effects from the situation we are experiencing, but China can still bring Lots of great innovation.
“I think it would be beneficial for anyone to engage with China,” he added.
Wall Street turns bullish
Billionaire investors, including founder of Appaloosa Management David Tepper and “Big Short” investor Michael Burry recently revealed that they will stick with their bets on China.
Recent 13F regulatory filings Showcasing Chinese e-commerce giants Alibaba Although Tepper reduced his stake in the company by 7% in the second quarter, it remains Tepper’s largest holding. Alibaba currently accounts for 12% of Appaloosa’s $6.2 billion stake.
Tepper has also increased stakes in other Chinese companies, including Jingdong, HKUST Holdings and two China exchange-traded funds (iShares China Large-Cap ETF and Jinrui CSI China Internet ETF).
Bury recently made a similar move. The prominent investor bought shares of Alibaba in the second quarter, taking an $11.2 million position in the company. That makes Alibaba Barrie’s largest holding, with other Chinese tech stocks such as Baidu and JD.com also prominent in Barrie’s portfolio.
Meanwhile, BCA Research recently upgraded China’s onshore stocks to “overweight,” and China strategist Jing Sima expects China’s onshore stocks to passively outperform global stock markets.
Veteran investor George Boubouras is also taking risks in China. K2資產管理公司研究部董事總經理看到了新興市場的機會，他告訴CNBC，他對北京有“戰術和動態傾斜”，並通過“中國的出口商”來利用這一機會，因為他們的收入來自developed country.
But there are also China bears on Wall Street. Looking more broadly, Goldman Sachs recently exited its long-term position in copper and cut its 2025 price forecast by nearly $5,000/ton, citing weak demand for the red metal in China. The pessimism is being felt across Wall Street, with Bank of America lowering China’s growth forecast for this year to 4.8%.
optimistic data
summer travel peak
Contrary to popular belief, China’s tourism industry also took a leap this summer. This quarter, the country’s railway passenger volume was approximately 872 million, an increase of 6.2% year-on-year. According to the Ministry of Transport of China.
Against this background, Beijing expects China’s air passenger traffic to hit a record high in 2024. Director General delivered a speech at the Asia-Pacific Aviation Safety Summit
The Lunar New Year holiday, the Paris Olympics and demand for flights between China and Japan, South Korea, Singapore and Europe are reportedly key drivers of Beijing’s tourism growth.
More broadly, Eric Lin, UBS’s head of research for Greater China, told CNBC’s “Street Signs Asia” earlier this month that despite the worrying macro data, “Chinese companies are doing well this year. Profits are very stable.”
“This will provide support for Chinese stocks in the short term, at least through the end of the year,” he said, adding that his team raised its MSCI China stock price target by 10% for the remainder of 2024.
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