Not all Chinese stock indices are built the same

Broadly speaking, global stocks are performing well this year. The MSCI All Country World Index returned 15% in the first eight months of the year, as rising inoculation rates allow businesses to reopen while central banks maintain accommodative interest rates to facilitate economic growth.

But like any indicator, stock markets only tell part of the story. While China’s economy recovered from the coronavirus pandemic earlier than other major economies, its main equity indices continue to reflect a mixed picture. Year to date, China’s CSI Index lost almost a tenth of its value while the Shanghai and Shenzhen Stock Exchange Composite Indexes are each up by that amount. The MSCI China...