Sector report: what next for China?

China's massive stimulus programme spared the economy from the global financial crisis but it did little for the country's equity markets. While US, UK and now Japanese stocks rallied on the back of quantitative easing, the main China indices have barely shifted. Three-year total returns on the MSCI China index were just 1.4% to the end of April. The average return in the IMA China/Greater China sector was just 3.6%, according to Morningstar. Stock valuations remain near historical lows. The initial bout of stimulus in 2009 augured well for an economy built on investment-led growth. B...