China assets are storming back into the spotlight as the Hang Seng Index (HSI) breaks decisively above 25,000—a level that looked almost impossible just months ago. The rebound is undeniable: battered valuations, renewed policy support, and a global search for bargains have made Chinese equities and ETFs among the world’s top performers in recent weeks. Flows are returning, momentum traders are piling in, and suddenly the phrase “China comeback” is on everyone’s lips.
The big question: Is this the start of a sustained bull run, or another false dawn in a market infamous for sharp rallies followed by painful reversals?
There’s a solid bull case. Valuations for China assets are still among the lowest in major markets, and Beijing has made it clear that stability and growth are top priorities. Easing measures for the property sector, looser monetary policy, and signs of improving sentiment among domestic investors have all contributed to the breakout. Add to that a global environment where U.S. tech feels crowded and expensive, and you can see why global investors are rotating back into China.
But there are still real risks. The Chinese economy faces long-term headwinds: property sector wounds are not fully healed, consumer confidence is fragile, and regulatory surprises remain a wildcard. Policy support can boost markets, but without real earnings growth and sustainable demand, rallies can fizzle as quickly as they started. If you hold China assets, it’s time to ride the momentum—but with tight stops and an exit strategy. If you’re on the sidelines, chasing after five consecutive green weeks is risky unless you’re ready for the volatility.
Personally, I’m watching key sectors like tech, banks, and consumer names for signs of lasting strength. If policy support continues and earnings rebound, China assets could keep running. But the scars of the last two years are still fresh, so staying nimble and avoiding blind optimism is the smart play. This could be the start of a real turnaround—or just another street party before the next storm.
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