The effect of profits in Chinese stocks usually extends to the market of emerging countries, but the situation is different this time. While the shares have jumped on the mainland of China over the past six months, free from a stagnation that has lasted for years, the stock performance in the broader emerging markets has remained largely stable. This contrast is attributed to the fact that the increase in Chinese stocks is caused by a wave of enthusiasm towards the technological sector, and not due to a comprehensive economic improvement that can expand its influence to other economies through the wide commercial bridges of China. “China is the result of a specific spending group led by the technological sector, which is more focused on investing the investment, and it is unlikely to have a significant impact on the rest of the emerging markets,” says Manic Narin, head of emerging market strategies in London. He added: “This is not the classic scenario of China as we saw in the years 2009, 2016 and 2020, which often ended with a recovery of upcoming markets.” The MSCI China has increased by more than 30% since the end of August, while the emerging market share index fell by 7% exception. It forms a clear variation compared to at least two historical periods that were witness to simultaneous profits: Chinese stocks increased by 63% between 2009 and 2010, while the broader emerging market index rose by 103%; In 2016-2017, Chinese shares increased by 50%, and the general index of emerging markets recorded 46%profits. The Chinese stock jumping jumped at the beginning of last September, with optimism about more economic motivation, but the profits have largely disappeared after advertising on monetary policy has disappointed expectations. The sustainable high wave began until January last year, with the introduction of a new artificial intelligence model of Deepseek. This current displacement of the performance between Chinese stocks and their peers in emerging markets is also shown by investment flow. Kraneshares CSI China Internet Fund, which is one of the largest boxes that follows the Chinese market, is $ 1.5 billion this year, while the iShares MSCI emerging this year. Markets ex china ETF) to the registration of one of the best known is the exit of investments since 2022. Vinchanso Vida, CEO of investment at DWS International, says in Frankfurt, renewed optimism between investors to Chinese stocks is not limited to the technological sector, and that Chinese shares can continue to reach better returns than the rest of the emerging markets. He added: “There is increasing optimism throughout the country, and it seems that the upset property market has reached the bottom, although it has not yet been reflected.” He added: “We assume that China’s performance, compared to the rest of the emerging markets, which have started since mid -January, will continue in the coming period.” A threat in Chinese stocks, but there is at least a major threat that could hinder the recovery of Chinese stocks and exacerbating the losses of other emerging markets is the possibility of imposing higher US customs duties. Investors around the world await President Donald Trump’s announcement of the so -called “mutual customs duties” on April 2. The fear of the market has increased this month after announcing the imposition of 25% fees on the imports of cars. China is particularly vulnerable to this kind of risk due to the great dependence on trade with the United States, and it was often the target of criticism by Trump and a number of senior officials in its administration. Some boxes have already begun to reduce their belongings in Chinese shares. “After increasing our investments in Chinese shares during 2024, many of our funds have begun to reduce some centers that have reached an increase in their value,” said Rohit Chopra, director of investment portfolio at Lazard Asset Management in New York. He added: “Our funds are exposed to China, are now a little less, or under the reference weight.” On the other hand, there are those who look more optimistic, and they believe that the separation of China can shrink from the rest of the emerging markets with the beginning of the Federal Reserve over the course of monetary policy. “We expect better flow to emerging markets this year with the reserve of the federal reserved the way of reducing interest rates,” said Wim-Hain Bassel, head of emerging markets at Robeco Instituteal Asset Management in Rotterdam. He added: “If the Chinese economy improves more, optimism and positive numbers can start by leaving the rest of Asia more clearly than in recent times.”
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