Cheapest Chinese Stocks Since 1997 Don’t Signal Rally

The last time China’s stocks were this cheap in 2008, the benchmark index rose 83 percent in a year. Now is different as policy makers struggle to reverse the worst economic slowdown in more than a decade, the most-accurate strategists say.

While the Shanghai Composite Index trades at 11.3 times the earnings of China’s biggest companies, the lowest level since at least 1997, economists predict the world’s second-largest economy will grow at its slowest annual pace in 13 years. Investors anticipate the government will lack focus on the slowdown as the Communist Party prepares for a once-in-a-decade leadership transition.