China: The Mother Of All Squeezes?

China: The ingredients for a squeeze

China has added $5 trillion to GDP since Covid, yet its equities have underperformed global markets by a staggering 110 percentage points. The disconnect between economic growth and shareholder returns has been extraordinary. But Goldman sees 10% trend earnings growth and potential valuation upside of 10–15%, while several key China indices are beginning to stabilize around important technical levels. The damage remains severe, but the ingredients for a powerful squeeze are starting to fall into place. Is the China bear finally running out of sellers?