What's going on?

Chinese stock markets entered 2023 with a bang.

What does this mean?

After a tumultuous 2022, China’s stock market finally seems to be regaining its shine. And that’s not for nothing: the country’s been easing its Covid policies and refocusing on growth – giving the struggling property sector a shot in the arm and seemingly softening its tough stance on business regulations. That’ll prompt deafening cheers from the tech industry, which has been especially battered by government crackdowns over the past two years. Just look at Ant Group: its request to raise $1.5 billion for its consumer unit was recently approved by regulators, triggering a 13% leap in part-owner Alibaba’s stock. Moves like that could explain why the MSCI China Index has had its best start to the year since 2009.

Why should I care?

For markets: US titans teeter.
Things aren’t going so well for US giants right now. ExxonMobil lost its place on one uber-exclusive list when Tencent – China’s gaming titan – strutted back into the club as one of the world’s ten most valuable companies this week. That’s left the oil giant sitting on its hands with previously ousted American members, like Tesla and Meta. And the immediate future doesn’t look much brighter: Amazon and Salesforce added to the tech layoff bandwagon this week in the face of slowing demand, while the minutes from the latest Federal Reserve meeting suggest interest rates might stay high for longer than expected. Not exactly a recipe for corporate success…

The bigger picture: Have a little patience.
China’s the world’s biggest oil importer, so you’d think its reopening would give oil markets a nice little pick-me-up. But it’s not that simple: relaxing restrictions has let Covid run riot, and the recent outbreaks have actually dampened demand for oil. Give it a few months, though, and China will probably have infections under control – and that’s when oil might feel the effects.