China’s stock market has lost momentum, Wu Qing, chairman of the China Securities Regulatory Commission, issued an unusual signal

[Guth an Dòchais 20 Dàmhair, 2024](Full report by our reporter He Jingtian) Communist Party of ChinaSecurities Regulatory CommissionPresidentWu QingA conference was held today, asking experts and the financial media to speak “politically”Chinese Economyand Chinacapital marketa storyChina stock marketThere have been large earthquakes recently,TroubleCome back. The disappointing press conferences of the CCP one after the other have exhausted the patience of the market, and even more so of consumers.confidence drop,China stock marketretail investorsInvestments are being rapidly withdrawn from the stock market, and overseas China-focused ETFs are beginning to fall back. Some research institutes pointed that outan investorDon’t believe in the CCP anymoreincentive measuresable to solveeconomic issues,China stock marketlosing momentum.

Communist Party of ChinaSecurities Regulatory CommissionPresidentWu QingA conference was held on Sunday (October 20) to communicate with experts, scholars, and representatives of financial media leaders and listen to ideas and suggestions.

Wu QingHe said that we should maintain and protect the current good momentum, stabilize expectations and strengthen confidence.

Wu QingNoting that the world today is going through unprecedented changes in a century, and China is in a critical period of moving towards “Chinese-style modernization”,capital marketIt is also at an essential stage of transition to “high-quality development.” He asked experts, scholars, and the financial media to speak well to “political, people (party) and professional requirements”Chinese Economyand Chinacapital marketStories provide “confidence and positive energy”.

Recently,China stock marketIt goes up and down like an obstacle. On Thursday (October 18), the press conference on the subject of the CCP buildings was unsuccessfulan investorAs I always expected,China stock marketAfter a sharp drop, the CSI 300 Index closed down 1.1% on Thursday, down about 11% from its Oct. 8 high. The press conference follows press conferences by the Ministry of Finance and the National Development and Reform Commission earlier this month that also lacked details on spending, which prompted real market volatility.

Ling Vey-Sern, managing director of Union Bancaire Privee, said: “The stock marketan investorThey are looking for big data that could push the stock market higher, while the government (Chinese Communist Party) is focusing more on how to stimulate the economy and the housing market. back to health gradually. As long as there is such a difference in expectations, every press conference will inevitably be a disappointment. “

China’s blue-chip CSI 300 index rose 3.6% on Friday, its biggest one-day gain in eight trading days, as the People’s Bank of China launched two plans aimed at boosting its take on the stock market.

althoughChina stock marketThe price has risen on the good news, but whether it can be sustained will be “bull market」,an investorThere is still no confidence.

Bloomberg reported that, as the stock market quickly rebounded and ran out of steam, somean investorWaiting for the second phase of the recovery to resume.

China’s $9.7 trillion stock market has risen rapidly since late September, when the People’s Bank of China stepped up.incentive measuresIt pushed the CSI 300 index up 25% in five trading days. much lateretail investorsan investorI got caught when the stock market crashed and had to leave in a hurry.

Reports indicate that there are 200 million in Chinaretail investorsan investorThe army was supposed to help the stock market turn around, but instead it became a source of weakness in the stock market.China stock marketDamage caused by extreme fluctuationsbull marketpreview. According to banking index,an investorFunds will be transferred from the trading account to the savings account very quickly.

On October 9, as the index posted its worst performance since 2020, “Close security account“The term appeared on the WeChat social media platform56 million timesa phrase that was used less than 10 million times a day in the previous weeks.

Around the same time, an index published by the Industrial and Commercial Bank of China Ltd. together with an increase in transfers from securities accounts to bank accounts, reversing a slight decline in the first week of October.an investorThe trend of using savings for market transactions shows that money is being moved quickly from stock trading accounts back to savings.

Bloomberg said the sudden change in sentiment had a negative impact on bullish hopes, with small investors encouraged by bullish propaganda in state media and Chinese social media.an investor(retail investors) instead became inaccurate, exacerbating stock price volatility.

Chinaretail investorsThe current situation shows that the national vision of the CCP is facing serious challenges. While China’s top leaders are relying on technology investment to drive economic development and emphasize “new productivity”, analysts point to the need to revive sluggish consumer demand and better leverage of the large pool of savings.

Bloomberg said,China stock marketshowing people’s personalityChinese Economyconfidence in the recovery plan, whileretail investorsan investorNervous shows fragile confidence.

For a long time, abroadan investorattracted by the opportunity for Chinese households to move more wealth into the stock market. According to the latest survey by the Central Bank of China, stocks accounted for only 2% of China’s household assets in 2019, compared to about 1/3 in the United States.

Manish Bhargava, CEO of Straits Investment Management in Singapore, said China has one of the highest savings rates in the world, and investing even a small part of their money in the stock market can have benefits. large given stock prices and market sentiment.

US Treasury Secretary Yellen also said that China’s national savings rate is as high as 40%, but the proportion of consumer spending is much lower than that of other countries.

In early October, a large influx of Chinese savings finally entered the stock market, but almost as quickly as the rush began, the stock market reversed. On October 9, amid speculation and speculation about the next bigincentive measuresAmid widespread doubts about when it would be introduced, the CSI 300 index fell 7%, its worst performance since the start of 2020.

“Market Watch” reported that recentlyChina stock marketThe decline from highs has reversed some of the gains from the September surge after China announced stimulus policies.

Yardeni Research said in a press release on Wednesday, October 17: “an investorIt seems they no longer trust the government (Chinese Communist Party).incentive measuresable to solveeconomic issues.China stock marketThe rapid rebound now appears to be beginning to falter. “

Data shows that ETFs investing in Chinese stocks have performed poorly recently. The iShares MSCI China ETF fell 5.6% this week before reversing, falling 7.7% last week, according to FactSet data.

Other China-focused ETFs have fallen even more this week, adding to losses since October.

As of October 17, the Invesco China Technology ETF and the KraneShares CSI China Internet ETF were both down 7.5%, while the Invesco Golden Dragon China ETF was down 7%.

Data shows that since this month, the KraneShares CSI China Internet ETF has fallen nearly 5%, the Invesco China Technology ETF and the Invesco Golden Dragon China ETF have both fallen nearly 4%, and the iShares MSCI China ETF has fallen more. this month.

“Putting aside the many risks of doing business in China, future earnings prospects have been largely flat over the past 15 years. From 2022, corporate employment has been disappointing,” said Yardeni information notes.

Yardeni Research also added: “It is relatively easy to use local government projects to misreport national growth data, but it is more difficult to misreport corporate employment.”

Yardeni noted that China’s outstanding bank loans total nearly $36 trillion, about three times that of the United States. And China’s consumer confidence has “slumped” and “rising stock prices alone are not enough to stimulate consumption.” Because “the collapse of the real estate bubble through loose financing conditions may not be the stimulus of a heavily indebted country.” “It will take time for consumers and businesses to rebuild their balance sheets and regain confidence in loans after they are withdrawn.”

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