Why bad news in China is good news for Australia.

No-one knows when the Chinese market will hit the bottom, but timing is not the key point.

Summary: Chinese shares are falling again, but the market is largely a state-run affair. We don’t know when the stock market rout will end, but what matters more to Australian investors is the policy response from the Chinese authorities. The People’s Bank of China will continue to cut rates and questions are even being raised as to whether a QE program is in store.

Key take-out: The Chinese equity rout is positive for Australian equities, as we live in a world where quantitative easing is viewed positively.

Key beneficiaries: General investors. Category: Economy.


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