The large macro disconnect in China is between its significant growth earnings, and stock returns. If we just look at China growth since 2010, we will see that the size of the economy increased by a factor over 3x. Earnings have increased, but little has changed in the last ten years. The stock market is almost flat since 2010. This is not the story that investors expected. Of course, the macro link between GDP and stock performance is far from perfect, but if you were given the growth numbers, most investors would have expected strong returns especially given the strong China export numbers. The negative view toward China is closely associated with the poor quality of this macro link.
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