bodyType

customContents

entityId

printArticlePageQuery

filter

article

body

urlAlias

articleSectionsContent

articleSeoArticle

articleSourceHeaderArticle

contentSchemaRenderContent

contentSubHeadlineContent

contentHeadlineContent

mainImagePrintArticleArticle

authorBlockPrintArticleArticle

contentSponsorTagContent

articlePianoPaywallContent

scmpYoutubeContent

hooksTrackPageViewArticle

query printArticlePageQuery(
  $entityId: String!
  $customContents: [CustomContentInput]
  $bodyType: BodyFormatTypeEnum
) {
  article(filter: {entityId: $entityId}) {
    entityId
    body(customContents: $customContents, type: $bodyType) {
      json
    }
    urlAlias
    ...articleSectionsContent
    ...articleSeoArticle_3o8td4
    ...articleSourceHeaderArticle
    ...contentSchemaRenderContent
    ...contentSubHeadlineContent
    ...contentHeadlineContent
    ...mainImagePrintArticleArticle
    ...authorBlockPrintArticleArticle
    ...contentSponsorTagContent
    ...articlePianoPaywallContent
    ...scmpYoutubeContent
    ...hooksTrackPageViewArticle
    id
  }
}

fragment articlePianoPaywallContent on Content {
  __isContent: __typename
  ...hooksPaywallPromiseContent
}

fragment articleSectionsContent on Content {
  __isContent: __typename
  sections {
    value {
      ...helpersCheckIfNewsSectionInFirstIndexSection
      ...entityLink
      name
      id
    }
  }
}

fragment articleSeoArticle_3o8td4 on Article {
  ...hooksArticleSeoArticle
  ...helpersCheckIsPostiesArticle
  ...helpersGetArticleTypeArticle
  entityId
  publishedDate
  updatedDate
  summary {
    text
  }
  subHeadline {
    text
  }
  body(customContents: $customContents, type: $bodyType) {
    text
  }
  keywords
  sections {
    value {
      name
      id
    }
  }
  topics {
    name
    entityId
    id
  }
  urlAlias
  authors {
    name
    id
  }
  images {
    style(filter: {style: "768x768"}) {
      url
    }
  }
  readingTime
}

fragment articleSourceHeaderArticle on Article {
  urlAlias
  ...entityLink
}

fragment authorBlockPrintArticleArticle on Article {
  ...defaultArticleDateContent
  ...authorNamesArticle
}

fragment authorNameAuthor on Author {
  ...entityLink
  name
  entityUuid
}

fragment authorNamesArticle on Article {
  authorLocations
  authors {
    entityId
    location
    ...authorNameAuthor
    id
  }
}

fragment blockquoteQuoteContent on Content {
  __isContent: __typename
  ...contentShareWidgetContent
}

fragment checkersCheckContentContainsStarlingImageContent on Content {
  __isContent: __typename
  topics {
    entityId
    id
  }
}

fragment contentHeadlineContent on Content {
  __isContent: __typename
  headline
  socialHeadline
  ...contentHeadlineTagContent
  ...helpersUseContentSponsorContent
}

fragment contentHeadlineTagContent on Content {
  __isContent: __typename
  ...hooksContentHeadlineTagContent
}

fragment contentNewsletterWidgetContent on Content {
  __isContent: __typename
  topics {
    relatedNewsletters {
      ...helpersMassageToNewsletterItemNewsletter
      id
    }
    id
  }
  sections {
    value {
      relatedNewsletters {
        ...helpersMassageToNewsletterItemNewsletter
        id
      }
      id
    }
  }
  ... on Article {
    relatedNewsletters {
      ...helpersMassageToNewsletterItemNewsletter
      id
    }
  }
}

fragment contentSchemaRenderContent on Content {
  __isContent: __typename
  ...blockquoteQuoteContent
  ...imageContent
  ...inlineWidgetContent
  ...photoGalleryWidgetContent
  ...scmpYoutubeContent
}

fragment contentShareWidgetContent on Content {
  __isContent: __typename
  entityId
  urlAlias
  shortUrl
  socialHeadline
  headline
}

fragment contentSponsorTagContent on Content {
  __isContent: __typename
  ...helpersUseContentSponsorContent
}

fragment contentSubHeadlineContent on Content {
  __isContent: __typename
  subHeadline {
    json
  }
  summary {
    json
  }
  ...contentSchemaRenderContent
}

fragment defaultArticleDateContent on Content {
  __isContent: __typename
  ...hooksArticleDateUtilsContent
}

fragment entityLink on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  __typename
  entityId
  entityUuid
  urlAlias
  urlRedirect {
    toUrl
    id
  }
  application {
    entityId
    id
  }
  ... on Section {
    fullSectionPath {
      entityId
      id
    }
    parentSection
  }
  ...helpersAppBarVariantBase
  ...helpersApplicationBase
  ...helpersCheckIsPlusArticle
  ...helpersStyleSectionContent
}

fragment helpersAppBarVariantBase on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  ...helpersCheckIsLiveArticle
  ...helpersCheckIsPlusPage
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostiesPage
  ...helpersCheckIsPostMagazineArticle
  ...helpersCheckIsStyleArticle
  ...helpersSectionContent
  ...helpersStyleSectionContent
}

fragment helpersApplicationBase on BaseWithApplicationAndUrlAlias {
  __isBaseWithApplicationAndUrlAlias: __typename
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostiesPage
  ...helpersCheckIsPlusPage
}

fragment helpersCheckIfNewsSectionInFirstIndexSection on Section {
  name
}

fragment helpersCheckIsAmpEnabledArticle on Article {
  entityId
  types {
    value {
      entityId
      id
    }
  }
  sections {
    value {
      entityId
      id
    }
  }
  disableOffPlatformContent
  sponsorType
  published
  ...helpersCheckIsPlusArticle
  ...helpersCheckIsPostiesArticle
}

fragment helpersCheckIsLiveArticle on Article {
  flattenTypeIds
  liveArticle {
    status
    id
  }
}

fragment helpersCheckIsMainTopicContent on Content {
  __isContent: __typename
  topics {
    entityId
    id
  }
}

fragment helpersCheckIsPlusArticle on Content {
  __isContent: __typename
  ... on Article {
    paywallTypes {
      entityUuid
      id
    }
  }
}

fragment helpersCheckIsPlusPage on Page {
  urlAlias
}

fragment helpersCheckIsPostMagazineArticle on Article {
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersCheckIsPostiesArticle on Article {
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersCheckIsPostiesPage on Page {
  urlAlias
}

fragment helpersCheckIsStyleArticle on Content {
  __isContent: __typename
  sections {
    value {
      entityId
      id
    }
  }
}

fragment helpersGetArticleTypeArticle on Content {
  __isContent: __typename
  ... on Article {
    types {
      value {
        entityId
        id
      }
    }
  }
}

fragment helpersMassageToNewsletterItemNewsletter on Newsletter {
  entityId
  name
  alternativeName
  description {
    text
  }
  summary {
    text
  }
  homepageDescription {
    text
  }
}

fragment helpersSanitizeArticleTypeEntityIdsArticle on Article {
  types {
    value {
      entityId
      id
    }
  }
}

fragment helpersSanitizeAuthorTypesArticle on Article {
  authors {
    types
    id
  }
}

fragment helpersSanitizedAuthorEntityIdsArticle on Article {
  authors {
    entityId
    id
  }
}

fragment helpersSectionContent on Section {
  fullSectionPath {
    entityId
    id
  }
}

fragment helpersStyleSectionContent on Section {
  fullSectionPath {
    entityId
    id
  }
}

fragment helpersUseContentSponsorContent on Content {
  __isContent: __typename
  topics {
    entityId
    sponsor {
      ...sponsorTagSponsor
      name
      type
      id
    }
    id
  }
  ... on Article {
    sponsorType
  }
  ...helpersCheckIsMainTopicContent
}

fragment hooksArticleDateUtilsContent on Content {
  __isContent: __typename
  createdDate
  publishedDate
  updatedDate
}

fragment hooksArticleSeoArticle on Article {
  ...helpersCheckIsPostiesArticle
  ...helpersCheckIsPostMagazineArticle
  ...helpersCheckIsStyleArticle
  ...hooksContentHeadlineTagContent
  ...helpersCheckIsAmpEnabledArticle
  entityId
  headline
  socialHeadline
  types {
    value {
      entityId
      id
    }
  }
  authors {
    entityId
    id
  }
  images {
    generic_og: style(filter: {style: "og_image_scmp_generic"}) {
      url
    }
    styles(filter: {styles: ["og_image_posties_article", "og_postmag", "og_image_style", "og_image_scmp_analysis", "og_image_scmp_explainer", "og_image_scmp_editorial", "og_image_scmp_fact_check", "og_image_scmp_debate", "og_image_scmp_live", "og_image_scmp_obituary", "og_image_scmp_opinion", "og_image_scmp_review", "og_image_scmp_series", "og_image_scmp_generic"]}) {
      url
      style
    }
    type
  }
  urlAlias
}

fragment hooksContentHeadlineTagContent on Content {
  __isContent: __typename
  __typename
  ... on Article {
    types {
      value {
        name
        entityId
        description {
          text
        }
        id
      }
    }
    ...helpersCheckIsStyleArticle
  }
  flag
  sections {
    value {
      name
      id
    }
  }
  ...hooksContentHelperContent
}

fragment hooksContentHelperContent on Content {
  __isContent: __typename
  ...helpersSanitizeArticleTypeEntityIdsArticle
  ...helpersSanitizeAuthorTypesArticle
  ...helpersSanitizedAuthorEntityIdsArticle
  flag
}

fragment hooksPaywallPromiseContent on Content {
  __isContent: __typename
  entityId
  ...helpersCheckIsPostiesArticle
}

fragment hooksTrackPageViewArticle on Article {
  entityId
  publishedDate
  headline
  sections {
    value {
      name
      id
    }
  }
  urlAlias
  authors {
    name
    id
  }
  entityUuid
}

fragment imageContent on Content {
  __isContent: __typename
  headline
  ...checkersCheckContentContainsStarlingImageContent
}

fragment inlineWidgetContent on Content {
  __isContent: __typename
  ...contentNewsletterWidgetContent
}

fragment mainImagePrintArticleArticle on Article {
  images {
    title
    url
    isSlideshow
    size_652x446: style(filter: {style: "652x446"}) {
      url
    }
  }
}

fragment photoGalleryDialogContent on Content {
  __isContent: __typename
  __typename
  ...contentShareWidgetContent
}

fragment photoGalleryWidgetContent on Content {
  __isContent: __typename
  ...photoGalleryDialogContent
}

fragment scmpYoutubeContent on Content {
  __isContent: __typename
  entityId
  urlAlias
  publishedDate
}

fragment sponsorTagSponsor on Sponsor {
  name
  type
  images {
    url
  }
}


sections

types

disableOffPlatformContent

sponsorType

published

headline

socialHeadline

authors

images

publishedDate

updatedDate

summary

subHeadline

keywords

topics

readingTime

authorLocations

entityUuid

Nicholas Spiro

In the minds of most investors, Chinese policymakers have a credibility problem. In the past few months, Beijing has signalled that it is leaning towards looser monetary and fiscal policies in response to China’s sharp economic slowdown.
The change of tone has become more pronounced and is underpinned by President Xi Jinping’s prioritisation of stability as he prepares for an unprecedented third term. The government has pledged to promote stability in capital markets, reduce the risks facing property developers and bring its overhaul of the tech sector to a close as soon as possible.
In the last week alone, the People’s Bank of China cut the reserve requirement ratio for banks and announced 23 measures, including support for local government infrastructure projects and more funding for smaller firms hit by the Covid-19 pandemic. Yet, despite the shift in policy, investors remain underwhelmed.
What started as disappointment with the government’s failure to ease policy more aggressively, when growth was slowing sharply, has turned into a loss of confidence in China’s economy.
The facts speak for themselves. The CSI 300 index of large Shanghai- and Shenzhen-listed shares has lost almost 18 per cent this year, helping erase all its gains since the World Health Organization labelled Covid-19 a pandemic in early March 2020.
Foreign investors, who poured money into China’s capital markets in 2020 and 2021, are reducing their exposure to the world’s second-largest economy. They sold more than US$7 billion of mainland stocks via exchange links with Hong Kong last month, according to Bloomberg data.


More worryingly, last month, overseas investors sold a record US$17.7 billion of Chinese government debt, which is perceived by many as a relative safe haven because of its low correlation with US Treasury bonds. That followed outflows of US$12.7 billion in February, according to data from JPMorgan.
While there are no signs of panic selling, a bearish bet on China is now the consensus view. According to Bank of America’s fund manager survey from April 12, “shorting” – or betting against – China is becoming one of the most popular trades.
The loss of confidence is even more worrying given that it stems primarily from a policy the government has no intention of reversing: its zero-tolerance approach to Covid-19.
External factors are also weighing on sentiment. The aggressive tightening in US monetary policy has stripped Chinese bonds of their yield advantage over US Treasuries, while Russia’s invasion of Ukraine has sparked unease about Beijing’s close ties with Moscow.
However, it is China’s growth-sapping “dynamic zero-Covid” strategy that is the overriding concern. The citywide lockdown of Shanghai, China’s financial and commercial hub, has thrown the disruption caused by the government’s draconian restrictions into sharp relief. It shows the extent to which Beijing is willing to compromise its economic objectives to avert a potential surge in deaths among the undervaccinated elderly.


The stark divergence between China’s zero-tolerance strategy and the “living with the virus” approach embraced by the US, Europe and Singapore is also a warning to foreign investors. Many look at the sharp falls in asset prices in China through the prism of Western policy responses to market turmoil.
Yet, it should be clear that Beijing’s priorities differ sharply from those in Washington and Frankfurt. Even before Xi launched his “common prosperity” campaign, designed to spread wealth and rid the economy of its capitalist excesses, China was focused on instilling discipline in its capital markets and was suspicious of foreign money.
China’s middle-class households with millions in debt see dreams of financial freedom dashed
Indeed, the government has been more concerned about the risks of excessive capital inflows. It has rightly refrained from opening up its debt market more quickly lest it suffer the kind of destabilising outflows that have struck other emerging markets.
Even after the selling pressure that China endured in the past few months, foreign ownership of the country’s government bonds stands at a record high of just under 11 per cent of outstanding debt, up from 4 per cent in 2017, according to JPMorgan data.
Global investors must reconcile themselves to the fact Beijing is just as unwilling to relax its approach to the pandemic as it is to loosen monetary and fiscal policy more aggressively. The former could result in a public health crisis of epic proportions, while the latter risks undermining financial stability when the Fed is raising interest rates.
This does not mean Beijing would stand idly by were there to be a more disorderly decline in asset prices. Yet, with the yuan more than 8 per cent stronger versus the US dollar since the start of 2020 and Chinese government bonds a paragon of stability compared with volatile US Treasuries, China is hardly hurtling towards a financial crisis.
The challenge facing Beijing is not to prevent a market meltdown. It is to provide enough stimulus to shore up an economy with no exit strategy from the pandemic in sight.
Nicholas Spiro is a partner at Lauressa Advisory


China’s priority is stimulus and stability, not saving falling markets

Ornamental lights decorate an empty street during lockdown in Shanghai on April 20. The Chinese government’s insistence on a “zero-tolerance” approach to Covid-19 is weighing on the economy as well as global sentiment. Photo: Reuters

Opinion

Comment

Business


While there are no signs of panic selling, a bearish bet on China is the consensus view as Beijing is locked into its ‘dynamic zero-Covid’ approach
Investors must accept that Beijing is as unwilling to relax its pandemic strategy as it is to loosen monetary and fiscal policy more aggressively



While there is no panic selling, a bearish bet on China is the consensus view as Beijing sticks to its ‘dynamic zero-Covid’ approach. Investors must accept that Beijing is as unwilling to relax that strategy as it is to loosen monetary and fiscal policy more aggressively.


China economy

Coronavirus China

Coronavirus pandemic

Macroscope

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Column

Macroscope | China’s priority is stimulus and stability, not saving falling markets

While there are no signs of panic selling, a bearish bet on China is the consensus view as Beijing is locked into its ‘dynamic zero-Covid’ approach Investors must accept that Beijing is as unwilling to relax its pandemic strategy as it is to loosen monetary and fiscal policy more aggressively

While there are no signs of panic selling, a bearish bet on China is the consensus view as Beijing is locked into its ‘dynamic zero-Covid’ approach

Investors must accept that Beijing is as unwilling to relax its pandemic strategy as it is to loosen monetary and fiscal policy more aggressively