China's Rediscovered Risk Appetite Helps the Central Bank, Too

The return of risk appetite in China is helping fix a problem that the central bank has been facing until now: the difficulty of getting its monetary stimulus out into the real economy.

Thanks to the delay on further tariff increases and the various stimulus measures over the past year, risk assets are returning to popularity with Chinese investors. Equities are now considered a better investment than bonds, and corporate bonds are preferred over those from the government and policy banks, according to analysts from China Merchants Securities and Industrial Securities Co.