China’s Two-Speed Economy Spurs Yawning Gap Between Stocks, Yuan
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓China’s two-speed economy is causing a gap between its financial markets this month.
- ✓While stocks and bond yields fell to one-year lows, the yuan got stronger.
- ✓Sophie Huynh said, “There has been a disconnect, mostly due to the ongoing Chinese two-speed economy.” Many investors now expect this trend to continue.
Story at a Glance
- Category
- MARKET
- Reported By
- Livemint
- Reading Speed
- 4 Minute(s)
- Market Focus
- India Economy
(Bloomberg) -- China’s longstanding two-speed economy is creating ever greater divergence in its financial markets, with stocks and bond yields sinking to more than one-year lows this month while the yuan has powered higher.
Markets are increasingly drawing a distinction between a weak domestic economy and a resilient export sector. This deepening divergence stands in sharp contrast to the narrative that took hold this time last year, when gains in stocks, bonds and the yuan fueled optimism that China was shedding its “uninvestable” label.
“There has been a disconnect, mostly due to the ongoing Chinese two-speed economy,” said Sophie Huynh, a fund manager at BNP Paribas Asset Management in London. Chinese stocks reflect weak domestic demand, “with consumption below policy targets and property still a drag,” she said.
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