China Reopening Is Mixed Blessing for Emerging-Market Assets (5 min read)
Zero-Covid policy easing in China has sent Hong Kong-listed Chinese stocks to the best start to a year since 2006, the yuan to a six-month high, and its bonds rallying for the third month. The story of China reopening is also improving emerging-market sentiment, making the asset class more attractive to global investors. Many developing-nation stocks rallied over this theme, especially the ones that are closely tied to China. However, some experts suggest China’s reopening could be a drag on the currency due to stagflation risk and policy impact.