Late last year, Chris Ruffle, a British fund manager who runs $209m (￡136m, €164m) in hedge fund assets for Martin Currie in Shanghai, heard from his sources while roaming the mainland on company visits that “people were not worried enough about returning inflation”.

Mr Ruffle, who started working in China for a metals trading company in 1983 and joined Edinburgh-based Martin Currie in 1994, concluded that Chinese interest rates would rise this year. That, he predicted, would have an impact on China’s property market.

In response, he shorted large-cap lenders such as Bank of China and highly geared property developers such as Guangzhou R&F Properties that had been all the rage. But he maintained long positions in obscure stocks such as vegetable producer Chaoda Modern Agriculture, printer- cartridge recycler Jackin International, prescription drug distributor Sinopharm Group, and insurance agent CNinsure.