On Thursday, the Chinese stock market experienced a significant rally, with the Shanghai Composite Index surpassing the 3,200-point threshold following a 1.16% increase. The positive momentum extended to other indices as well, with the Shenzhen Component Index climbing 2.25% and the ChiNext Index, which focuses on technology stocks, rising by 2.27%. This resurgence saw over 4,900 stocks closing higher, with more than 200 stocks hitting the daily limit or surging by over 10%. Noteworthy gainers included companies in the e-commerce, consumer electronics, baby products, and duty-free sectors.
Yang Delong, the chief economist at First Seafront Fund in Shenzhen, highlighted that the surge in stock prices was part of a broader rebound, coinciding with China’s firm response to US trade policies. China’s retaliatory measures against US tariffs, such as raising additional tariffs on US imports and expanding export controls, demonstrated the country’s commitment to safeguarding its interests. Yang emphasized that China’s diverse industrial capabilities and policy flexibility positioned it well to mitigate external trade challenges and stimulate domestic demand, bolstering investor confidence.
Market analysts, including Meng Lei from UBS Securities Co and Liu Jinjin from Goldman Sachs, underscored the resilience of Chinese assets amid global uncertainties. They noted the influx of long-term funds into the A-share market, a trend encouraged by Chinese regulatory authorities to enhance market stability. Meng projected significant capital inflows in 2025, with insurance companies, public funds, and the social security fund expected to inject substantial amounts into the market, signaling growing investor optimism.
The recent market rally reflected investors’ belief in the resilience of the Chinese economy against external pressures. Dong Shaopeng, a senior research fellow at Renmin University of China, highlighted that China’s stable market conditions and policy predictability have attracted foreign investors seeking long-term growth opportunities. The surge in consumption and investment further bolstered market sentiment, with several centrally administered state-owned enterprises announcing plans for share repurchases, signaling their confidence in the market’s outlook.
To ensure market stability, China’s financial regulators and the state-backed “national team” swiftly intervened, with Central Huijin, a state-owned investment company, pledging to address abnormal market fluctuations decisively. The People’s Bank of China affirmed its support for market stability measures, emphasizing its commitment to providing necessary support to maintain the smooth functioning of the capital market.
The positive performance of the Chinese stock market amid global uncertainties underscores the country’s economic resilience and the confidence of investors in its long-term growth prospects. As China continues to navigate evolving trade dynamics and promote market stability, the influx of capital and strategic interventions are poised to sustain the momentum of its financial markets.
