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Down Is Still Up for Foreign Investors Piling Into China

  • Chinese equities underperformed after record bullish bets
  • Debacle highlights challenge of forecasting China’s direction
China Evergrande Group Headquarters as Company Pays Back Some Cash Owed to Wealth Product Investors
Photographer: Gilles Sabrie/Bloomberg

Like the demise of Enron Corp. and the collapse of Lehman Brothers, the debacle at China Evergrande Group was inevitable to some only in retrospect.

As recently as June 8, analysts at JPMorgan Chase upgraded their rating on the shares of the world’s most indebted developer to overweight from neutral. “Sales of Evergrande should improve, which should remove concerns among investors,” they wrote.