Amundi CIO: China Equities Are Much Cheaper but Overseas Trading Crackdown Hurts Sentiment

The Quick Take

• Amundi CIO Vincent Mortier calls China equities 'much cheaper' but warns the overseas trading crackdown is a sentiment negative.
• China's regulatory move restricting offshore trading platforms is described as a net negative for foreign investor confidence.
• Valuation arguments favor Chinese equities at current levels despite regulatory unpredictability remaining a key risk.

China's equity markets have undergone significant compression since their 2021 peak, with the MSCI China index trading at single-digit forward P/E ratios compared to 30x at the bubble peak. Amundi, Europe's largest asset manager with over €2 trillion under management, carries significant weight in institutional investment committees. Its CIO's assessment of China as 'much cheaper' reflects a genuine valuation opportunity emerging after three years of regulatory crackdowns, real estate deleveraging, and capital outflows. However, the new crackdown on overseas trading platforms — targeting retail Chinese investors using offshore accounts to access global markets — signals the government's continued willingness to use capital controls as a policy tool.

The market implication bifurcates sharply: for global asset managers with China exposure, Mortier's comments validate a patient accumulation thesis, but the overseas trading crackdown creates operational risk for cross-border positioning. Brokers operating in Hong Kong and Singapore that serve Chinese retail investors — including Futu Holdings and UP Fintech — are direct casualties, as their business models depend on Chinese nationals trading offshore. On the upside, A-share domestic brokers and ETFs, particularly CSI 300 index products, benefit from capital being corralled into onshore venues rather than flowing abroad.

Watch China's next National People's Congress policy signal on capital account liberalization — any softening of overseas trading restrictions would be a significant sentiment catalyst for international allocators. MSCI's China weight review is a secondary catalyst: if MSCI maintains or lifts its China weight, passive inflows support A-share recovery. The macro variable is China's Q2 2026 GDP growth target — the 5% official target is widely seen as requiring further monetary or fiscal stimulus, and any meaningful stimulus announcement would accelerate the valuation re-rating thesis that Mortier is describing.

Synthesized from 1 source.