Reading the tea leaves: a volatile year ahead for China’s market amid policy uncertainty

Others such as JPMorgan Asset Management and T. Rowe Price Group want to see more evidence of a stabilisation in the economy and corporate earnings before they put more money on the table.

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Goldman Sachs is an outlier. The US investment bank is the most bullish among its global peers, forecasting a rise of at least 13 per cent in China’s key equity benchmark, putting its faith on accelerating earnings growth and improved valuations on the back of policy support.

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“Until there are more concrete details on how the government implements more proactive policies, the market will remain range bound and prone to disappointment,” Aaron Costello, head of Asia at Cambridge Associates, said in an interview. “For Chinese equities to meaningfully outperform, we need to see the policy announcements result in an actual easing of deflationary pressures and a rebound in corporate earnings, both of which will take time.”