Liquidity is so easy, said one Hong Kong trader last week, that investors are even buying Chinese banks. These behemoths are, or were, the least-liked sector of an unloved market. But they are the driver behind the fact that Hong Kong’s main Chinese benchmark was among the world’s top 10 performing indices in the past month. A change of views on China, or just money sloshing around in search of a home?

By the numbers, views on Chinese stocks could hardly appear more negative. Equity investors have pulled more money out of China this year than all other emerging markets combined, and kept doing so even during the recent EM rally, says HSBC. In spite of its 7.3 per cent rise in the past month, the Hang Seng China Enterprises Index (HSCEI), the main gauge of international sentiment towards mainland stocks, is still trading on just eight times expected earnings, compared with 14 for blue-chip mainland listings, and 19 times for the S&P 500.

Views on China’s economy depend on whether you are a bear or, that rare thing, a bull. Retail sales of 10.2 per cent year-on-year came in below expectations last week while industrial production slipped from 6.2 per cent to 6 per cent. Bears see both as a slowdown; bulls see a still decent growth rate. But one metric that everyone can agree is scary is credit, which is still growing at 12 per cent, or about twice the rate of the overall economy.