China is distorting its stockmarket by trying to prop it up
State purchases of shares are bad enough, but other measures are far more destructive
Investors in China’s stockmarket have been doing handsomely this year. The Shanghai composite index has risen by 12% from a multi-year low in February, notwithstanding a recent drop. Equity analysts and state media alike are cheering. For Xi Jinping, China’s leader, the rally was a relief, since retail investors own at least 80% of the market. A previous rout hurt them badly, adding to anxieties about the country’s future. To many, the recovery reflected good governance and fortune.
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This article appeared in the Finance & economics section of the print edition under the headline “In the stocks”
Finance & economics June 15th 2024
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- China is distorting its stockmarket by trying to prop it up
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- China’s currency is not as influential as once imagined
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From the June 15th 2024 edition
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