Chinese Assets Year-End Showdown! How much more potential?

Chinese assets are once again capturing the attention of global investors, especially after the frenzied "bull market" in October, leading many to speculate whether another upward surge is on the cards for this year.

On Monday, the Chinese government released the post-meeting report from the Politburo meeting, which offered an outlook for the coming year's economic prospects that exceeded market expectations. The policy statements were notably more optimistic than they have been in a decade.

After 14 years, the "moderately loose" monetary policy is introduced again. How powerful is it?

This phrase was last used following the 2008 financial crisis and adjusted to "stable" in 2010. Its return signifies a shift towards a more proactive fiscal and monetary policy approach, potentially influencing future market sentiment and expectations.

$HSI(HSI)$   quickly responded at Monday's close, reclaiming the 20,000-point mark. $Direxion Daily FTSE China Bull 3X Shares(YINN)$   surged over 23% on Monday before slightly retreating. Some investors believe that the robust October rally may not be replicated, with the market now anticipating a steady and healthy upward trend.

Noteworthy is the upcoming Central Economic Work Conference, where plans for next year's economic activities will be laid out, and further clarification on fiscal and monetary policies could be provided, areas of high concern for investors.

"It's Time to Allocate to China"

Looking ahead to 2025, major international investment firms such as BlackRock, Goldman Sachs, Morgan Stanley, UBS, Schroders, and J.P. Morgan Asset Management expresses optimism about the performance of Chinese assets. BlackRock's "2025 Global Investment Outlook," published on December 4th, advocates a tactical overweight position on Chinese equities, noting their valuation attractiveness relative to developed markets—a stance that adds an intriguing dimension to their outlook.

What Are the Investment Directions?

Both Morgan Stanley and Goldman Sachs foresee China's growth in 2025 shifting toward domestic demand (excluding housing). Morgan Stanley anticipates that future incremental policies might lean more towards the consumer sector. Similarly, BlackRock Fund highlights a focus on the consumer sector, seeing opportunities in the transition from traditional to diverse consumption, as well as in AI hardware and software companies.

Go ahead quickly with these ETFs. Of course, if you're also interested in investing in Hong Kong stocks, consider these as well (chart picture attached):

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