The flow of new travellers to China has increased, particularly since 54 countries are now included in the visa-free policy.
This change does not impact Singaporean citizens, but it opens opportunities for expats based in Singapore. Many expats are about to take their first business trip to China or their first tourist trip as a prelude to future business engagements.
The expansion of the visa-free policy has provided more opportunities for people to compare their experience on the ground with the impression of China promoted by Western and US media, in particular.
Many TikTok videos, LinkedIn postings and Facebook reports cover the same issues and provide a shortcut to understanding what visitors can expect. They are useful research tools for first-time visitors.
Perhaps the most prominent observation is the level of development. Photos of Shanghai simply fail to prepare the visitor for the reality on the ground. This is Singapore on steroids.
Visitors quickly find that public security in China is very good. Women can safely wander around at night. Singaporeans take this for granted, but for other visitors, it comes as a welcome surprise.
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Many note that the relationship between Chinese police and the public is different from that of Western police and the public. In the US, the police are fully armed and ready for combat. Chinese police are more approachable. The idea that China is a police state with the population living in a state of constant fear is quickly dispelled.
However, if one breaks the law, the consequences are significant.
First-time visitors inevitably comment that Chinese people are very friendly and polite. Of course, there are rude and abrasive people, but more often than not, people will stop and assist if you appear lost or are having trouble communicating in a shop.
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Like Singapore, Chinese urban management in the larger cities is good, clean, hygienic and very quiet, with a high number of electric vehicles on the road. China's urban transportation is highly developed and similar to the MRT in terms of service, cleanliness and construction. The subway is clean, hygienic and affordable, with air-conditioning everywhere. This is a major shock for those accustomed to London’s Underground or New York’s subway system.
China's high-speed rail provides a genuine alternative to domestic air travel. It is incredibly fast, very punctual, very smooth and affordable, even if you choose to travel first class. The railway stations are more like Changi International Airport than Raffles MRT Station.
Inevitably, first-time visitors comment on China's high level of technological development. They are surprised by intelligent robots, autonomous vehicles and the absence of cash transactions. Many hotels use facial recognition to open guest room doors.
Visitors' major complaint is not being able to use cash. Before going to China, it is important to link your credit card or bank account to the AliPay or WeChat Pay service. Instructions are on the web. WeChat is the go-to method of communication.
Just as in Singapore, DiDi and other ride-hailing services have reduced the number of taxis cruising for business, so it is recommended that you install this app prior to travel.
China has always surprised first-time visitors, but after the Covid-19 lockdown, China has even more surprises. It is more important than ever to leave your preconceptions behind when you pack your luggage for your first China visit.
Technical outlook of the Shanghai market
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The Shanghai Index retreated after the brief rally and successfully tested the 2,920 support level. A sustained rebound rally from this strong support level has a significant resistance target near 3,080.
The Relative Strength Indicator (RSI) provides an important guide to market turns for the Shanghai Index. When RSI divergence appears it is an accurate and timely signal of market changes.
Is this an RSI divergence? Technically, it is not. The pattern of low valleys on the Shanghai Index shows a downtrend. The pattern of valley lows on the RSI shows an upsloping trend line. But — and it is an important but — the value of the most recent RSI valley is above 30 points. A classic RSI divergence signal has both valley lows below 30 points.
However, we note that the RSI divergence signal that came as the index fell also included a second RSI peak that was “technically” below the 70-point trigger level. We used this relationship as a confirming indication rather than as an initiating trigger for the trend reversal.
We extend the same compromise to the current situation and use the almost correct RSI divergence as supporting evidence of a trend change. We put this alongside other indicators that suggest a trend change is developing. Unlike a technically perfect RSI divergence pattern, this is just another supporting piece of evidence.
The rebound rally is potentially the beginning of a trend change. The first, and weakest, resistance feature is the value of the upper level of the short-term group of averages in the Guppy Multiple Moving Average (GMMA) indicator.
The first significant resistance barrier is the value of the long term group of averages. These are turned down, but tightly grouped. This suggests that there is not strong selling pressure. This makes it easier for the rally to overcome this resistance feature.
The most significant resistance feature is the upper edge of the trading band near 3,080. Traders and investors will watch carefully if this rebound can develop into a rally and then into a trend change.
Daryl Guppy is an international financial technical analysis expert. He has provided weekly Shanghai Index analysis for mainland Chinese media for two decades. Guppy appears regularly on CNBC Asia and is known as "The Chart Man". He is a former national board member of the Australia China Business Council
