Investors have cheered the relaxation of restrictions. China’s CSI 300 index, which tracks the largest mainland-listed stocks, has risen 5.8% since China announced a reduction in the quarantine period for travelers on Nov. 10. Hong Kong’s Hang Seng index
is up 18.9% over the same period.
And it’s not just the reopening that is driving market optimism. China has, in recent months, announced a slew of measures in an effort to arrest the country’s worst property slump in decades, raising hopes of a turnaround in the beleaguered sector.
Wall Street is taking notice. Morgan Stanley
turned bullish on China stocks for the first time in nearly two years, upgrading China to overweight versus emerging market stocks on Dec. 4 as the country embarks on a “clear path set towards reopening.”