China rallies at the back of government intervention, raising hopes of a sustained turnaround. We think it’s a good step forward, but unlikely to be needle moving enough.  2 important events this week leading to a sharp rally in Chinese stocks, raising hopes of a China sustained turnaround.

1. The PBoC held a press conference on 24 Sep to announce incremental measures to support and revitalize the economy.
2. On 26 Sep, an off-schedule Politburo meeting chaired by President Xi set multiple economic objectives. The last two occasions of off-schedule meeting was March 2020 after the Covid outbreak and October 2018 during the US-China trade dispute.

While the market expected new measures to be introduced at some point given the state of the Chinese economy, the timing and magnitude came as a surprise to some extent. Overall, given how the market reacted, this exceeded market expectations. The key debates now are: Will this be enough? Will the government continue to be proactive in...