Given their 2021 divergence, you have to wonder what 2022 has in store for Chinese and global stocks. Stocks always do what is least expected and — even after markedly different 2021 experiences — that looks remarkably similar for stocks in your country and worldwide now. While I forecast only one year at a time, the biggest shock right now — hence, what is most likely — is two or three strong years from here, with global stocks extending their bull market and Chinese stocks beginning a new one. Before you reject this thesis, let me explain.
First, my 2022 forecast: Global stocks should grind sideways in an often scary and frustrating stock market into the summer — followed by a very strong autumn and winter, putting full-year returns up double digits. In China, 2021’s sentiment-driven bear market should end, with markets spring-loaded for a steep rebound. The exact start is anyone’s guess. Trying to pinpoint it is a fool’s errand. But it will come.
