Has investor bullishness about China’s post-Covid reopening trade run ahead of economic reality? Yes, say a growing number of global investment banks and asset management firms. “Overhyped,” is how Wang Qi, CEO of MegaTrust Investment, puts it. Strategist Arthur Budaghyan at BCA Research is using the same word in meetings with clients. “We expect the Chinese economy to recover, but the issue is how much is already priced in,” he says. To be sure, China’s return as a growth engine is a plus for the global economy. Its rapid reopening from its previous “Zero Covid” lockdowns has prompted economists everywhere to revise 2023 prospects. But Goldman Sachs reports that onshore clients have real questions about the pace and durability of China’s economic rebound. Xi Jinping’s economy “is still not firing on all cylinders,” says strategist Julia Wang at JPMorgan Private Bank. “Housing sector-related data is still quite weak. Income growth will likely recover with a lag. It still continues to be a question of confidence in the sector.”