China keeps on attracting investment funds and since the beginning of 2021 has already taken a very strong lead over the S&P 500.
Chinese economy has a multitude of supporting factors not only from the prospect of the fundamentals of the economy but also from the general outlook as the five-year plan of the Chinese economy progresses.
Weak dollar, american low interest rates and huge investment funds of big fund managers create a strong wave of capital inflows into the Chinese economy and the Chinese stock market. As the Chinese stock market offers amazing investment opportunities in companies with strong growth potential, it creates long-term investment prospects as this trend is just now unfolding and will have the support of new funds.
Given that 12 months after the pandemic, Chinese exports have risen sharply, we estimate that by 2021 the corporate profit gap will close quite aggressively and this will not only support existing valuations but will be enough to push the Chinese stock market into even more higher levels, because as we have mentioned several times, the Chinese stock market is now entering a long-term bull market.