China’s Stock Market Concerns

Morgan Stanley’s Chief China Economist, Robin Xing, describes China’s stock market as an “excitable dog on a very long leash,” indicating the need for policy guardrails to manage its volatility. Authorities are worried about the rapid rally’s sustainability and its economic implications.

Household Deposits and Equity Market

Xing expresses skepticism that household deposits will significantly flow into equities as anticipated. He emphasizes that stronger policy support is necessary to truly reflate the economy and maintain the current market rally, highlighting the cautious stance of policymakers amid rising equity valuations.