Forget the doomsayers’ warnings over the parlous state of China’s economy: the country’s stockmarkets are on a tear. In the year-to-date, the main bourses have managed a total return of two-fifths. Notwithstanding the US S&P500’s multiple record high closes, the MSCI World Index has eked out a paltry 7 per cent over that time. Only Argentina has delivered a meaningfully higher return – up about four-fifths this year.

The drivers behind improving sentiment in Chinese markets have been more symbolic than fundamental. Mid-month, the long awaited Shanghai-Hong Kong Stock Connect scheme was launched. The same week, the PBoC announced an interest rate cut. But after the flurry of the first few days, the Stock Connect take up was limited and the rate cuts amounted more to guidance than directives. And yet Shanghai’s stock market turnover has surged and is at daily highs. In the entire month of November, the market traded nearly $800bn; in the first five days of December, the value traded has already surpassed $350bn.

Because the longer term outlook for policy is bullish. Economists expect further cuts in interest rates, and, more significantly, a cut in the reserve requirement ratio for banks – a measure that directly increases money supply. Against this backdrop, the capitalisation of China’s equity markets last week overtook Japan’s to rank second only to the US, according to Bloomberg data.