Ruchir Sharma on what is driving the rally in Chinese stocks

Xi Jinping is very aware that he needs the private sector to help grow.  He's facing the headwinds from the U.S., the uncertainty with the tariffs.  He needs the private sector now.  So he's trying to make the private sector more of an ally rather than the hostile attitude that he adopted a few years ago.  That's a change.

But so far, the rally has nothing to do with the stimulus.  It is very much a sentiment shift triggered by low valuations and the fact that DeepSeek has shifted the perception on China's tech prowess.

~ Ruchir Sharma, founder, Breakout Capital, "DeepSeek has shifted the perception on China's tech prowess," CNBC, February 26, 2025