Bull run conforms with policy interests

After surging toward the tail end of 2014, Chinese A-share markets have had a rough start to 2015. Many wonder whether the bull market has run its course. Chen Li, an investment strategist at UBS, recently argued that the uptrend isn't over, it's just slowing. Improving profits, Chen claims, can drive stocks even higher.

The current market climate isn't a product of strengthening economic fundamentals, but of policy decisions. A buoyant stock market plays into the hands of officials pursuing structural adjustments and reforms in the State sector. The same can be said about those working to implement registration-based IPO mechanism.

Recent run-ups have enriched only a portion of A-share investors and onshore-listed companies. The Shanghai Composite Index may have risen more than 50 percent over the past year, but most of the gains have been notched by heavily weighted stocks in pillar sectors. Small-cap growth companies have largely underperformed.

With more headway still to be made on market reforms, planners may find ways to keep the bulls running, albeit at a more measured pace.