Bullish sentiment: Xi applauds at the Great Hall of the People in Beijing. His ambitious goal comes as Donald Trump’s chaotic rollout of tariffs has raised the odds of a US recession and sent American megacaps into a tailspin. — AP
BEIJING: President Xi Jinping’s push for economic expansion and technology innovation is feeding optimism that Chinese stocks will continue this year’s advance and widen their lead over churning US equities.
Franklin Templeton Institute sees the emergence of a “Xi put” – akin to the so-called “Federal Reserve put” – a view that authorities will deploy market-friendly measures and more stimulus to achieve the about 5% economic growth target set this month.
Xi’s ambitious goal comes as Donald Trump’s chaotic rollout of tariffs has raised the odds of a US recession and sent American megacaps into a tailspin.
The idea of a “Xi put” marks a notable shift in investor perception about the Chinese leader, whose power grip had deterred foreign flows over the past few years.
In contrast, the belief over a “Trump put” is fast fading. The MSCI China Index has soared almost 20% so far in 2025 while the S&P 500 Index has shed about 4%.
That is on course to be the biggest quarterly outperformance since 2007.
With fresh measures anticipated to revive consumption and signs of an earnings recovery emerging, JPMorgan Chase & Co and Templeton are among those forecasting the rally to widen beyond the tech sector in the coming months.
“Given that Beijing would seize this opportunity to try to stimulate the overall economy and broaden the rally, the phrase ‘Xi put’ is apt”, said Kok Hoong Wong, head of institutional equities sales trading at Maybank Securities in Singapore.
While China’s surge so far has been driven by technology shares, thanks to the rise of DeepSeek, the market’s advance on Friday showed more sectors are starting to participate.
The CSI 300 sub-index of consumer staples jumped 5% ahead of a briefing today on boosting consumption.
According to a metric from the BNY measuring global institutional investor flows, Chinese equities saw three straight weeks of inflows, with the week ending March 6 drawing the biggest amount since February 2023.
Furthermore, JPMorgan processed a record amount of currency conversions into Hong Kong dollars and Chinese yuan in recent weeks, suggesting inflows into local shares.
“The recent shift from United States to China investments could signal a rehabilitation of Chinese assets within foreign portfolios,” said Gary Dugan, chief executive officer of The Global CIO Office. — Bloomberg
