China’s largest package of economic reforms since the 1990s is getting a bigger vote of confidence from foreign investors than from the nation’s own citizens.
The benchmark index for Chinese stocks traded in Hong Kong has jumped 6.2 percent, more than twice the Shanghai gauge, since policy makers led by President Xi Jinping pledged to ease China’s one-child policy and liberalize interest rates on Nov. 15. That left mainland shares valued at a 5.8 percent discount, the most in three years, according to the Hang Seng China AH Premium Index.
In a year when Asian equities are up 10 percent and American stocks are rising the most in a decade, China’s market is getting little respect, even from its own citizens. The Shanghai Composite index is down 3.4 percent, trailing its Hong Kong counterpart by the most since 2010. Investors saddled with $698 billion of lost market value since 2010 are proving difficult to win back even as valuations in industries such as cement and transportation offer some of the biggest discounts ever versus companies traded outside the mainland.