China stimulus debate simmers on social – now you can’t follow an economist, fund manager

Contentious posts by prominent players on the popular Weibo microblog platform call into question the nature of bearish vs bullish bets on China’s economy

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Prominent economist Ren Zeping (pictured) said he expects China’s economy to enjoy a prolonged bullish run, while decrying those who are bearish on the national economy and policies. Photo: Weibo

Published: 7:30pm, 16 Oct 2024Updated: 9:24am, 18 Oct 2024

A slew of stimulus measures announced by Beijing since late last month, while having rallied the interest of China’s roughly 200 million retail investors, have also sparked divisive debate over their immediate impact on economic prospects and investment decisions – as highlighted in the opposing assessments by a prominent economist and star fund manager in recent days.

The policy decisions have also triggered government scrutiny over leveraging, as the 2015 stock market rout and its hard-learned lessons continue to haunt financial regulators.

Meanwhile, sizzling discussions across Chinese social media have followed wild market swings this month – the benchmark Shanghai Composite Index fell 1.72 per cent over the past week in the absence of a headline stimulus figure from the top economic planner and the finance ministry.

And as of Friday, Bloomberg data had shown that the 10-day realised price swings of the benchmark CSI 300 Index had reached a level not seen since August 2015, with the volatility being amplified as day traders resorted to profit-taking, taking advantage of the rapid rise in stock prices.

“Those who shouted about the bull market – the ‘experts’, ‘scholars’ and media writers who encouraged retail investors to dive in – should they come out and apologise?” Dan Bin, president at the Shenzhen-based financial institution FEOSO Harbour Investment Management, said in a Weibo post on Friday.

Dan is an influential investor, and his account on Weibo – the Chinese equivalent to X, formerly known as Twitter – has 13 million followers.