How China is losing the narrative in the global coronavirus recovery

Stories matter. For those who doubt the power of narratives in financial markets, a cursory glance at the recent works of Robert Shiller, a Nobel economics laureate at Yale University, reveals the extent to which markets are driven by popular narratives as opposed to hard data. When it comes to the recovery from the Covid-19 pandemic , there have been several big themes that investors have latched onto to explain and justify movements in asset prices. The dominant theme last year, along with unprecedented amounts of monetary and fiscal stimulus, was the swift and vigorous recovery of China's economy. This…