Last week I wrote a post that discussed the Chinese government’s signaling to local investors (LINK) through lower margin rates.
Yesterday, China announced that their pension funds would begin purchasing Chinese equities this year:
Typically, pension funds and other large institutional investors don’t signal what they intend to buy so as to avoid front running (buying before a large buyer enters a position, and selling after the price has been driven higher), but it seems as if this is just what the Chinese government would like to encourage.
In the Western World we’re used to the adage: “don’t fight the FED”. I would venture to suggest that one should be very cautious if they are considering betting against the Chinese as well.