China's slow bleed

China's recent Third Plenary meeting disappointed observers who anticipated growth-oriented policy shifts. Instead, the Communist Party emphasized "common prosperity" and increased state influence, reflecting a departure from prioritizing economic growth.

China's economy is experiencing stagnation post-pandemic, with weak consumer sentiment and a troubled property market, despite strong export performance. While the Bank of China's rate cuts aim to address supply issues, they have not substantially invigorated demand.

Although projections remain moderately optimistic for GDP growth, opportunities for investors are shifting towards value-oriented State-Owned Enterprises (SOEs), which have outperformed growth stocks recently. The environment under Xi Jinping has stifled entrepreneurship, suggesting a long-term focus on cultural and technological objectives over immediate economic recovery.

Overall, the outlook reflects a gradual economic decline amidst demographic challenges and geopolitical competition.