Chinese stocks rally as crackdowns ease

China’s CSI 300 benchmark stockmarket index has rallied 13% since a low early last month as conditions improve for investors.

“China has shifted from driving global growth to driving global volatility,” OECD chief economist Laurence Boone tells Les Echos. The intergovernmental think tank thinks the country will grow by just 4.4% this year. “China is still suffering from the difficulty of moving from an economy centred on its exports to an economy more dependent on internal consumption.”

Investors in China have more immediate concerns. Listed tech firms have lost about $2trn in value over the past 12 months as regulators tighten the screws. Repeated Covid-19 lockdowns and growing geopolitical tensions have also darkened the mood. But now “some of the darkest clouds looming over the market show glimmers of parting”, says Reshma Kapadia in Barron’s. Regulators are said to be winding up a probe into ride-hailing service Didi, which was  launched last year after the firm defied authorities and listed in New York. That may also mean the end of a ban that has prevented it from signing up new users.

Foreign investors have been net sellers of Chinese stocks since March, but snapped up $5.5bn worth of equities listed in Shanghai and Shenzhen last week, says Hudson Lockett in the Financial Times. The CSI 300 benchmark has rallied 13% since a low early last month.

Still, signs of more market-friendly policies are not about soothing investors’ feelings, says Shuli Ren on Bloomberg. “The recent regulatory easing is most likely intended only to create jobs.” Tech, media and education firms are vital employers of recent graduates, a new batch of whom will join the job market in July. “The government’s many objections toward tech companies, from antitrust to data security, have not changed. Their business models are still on shaky ground.”

Recommended

Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

The Energy Price Guarantee will now be extended, but how much will your gas and electricity cost you in 2023?
9 Dec 2022
What is an annuity?
Glossary

What is an annuity?

Annuities are growing in popularity as rates increase. But what is an annuity, and how do you get one?
9 Dec 2022
National Grid gets ready to pay households to cut energy use this weekend
Personal finance

National Grid gets ready to pay households to cut energy use this weekend

The cold weather and unfavourable wind conditions have raised concerns about electricity supplies, prompting the National Grid to consider paying hous…
9 Dec 2022
Asda cuts fuel prices by 5.5p a litre
Personal finance

Asda cuts fuel prices by 5.5p a litre

Asda is now selling the cheapest fuel. We look at if fuel prices are now set to come down further and how to save on costs.
9 Dec 2022

Most Popular

Is it cheaper to leave the heating on low all day?
Personal finance

Is it cheaper to leave the heating on low all day?

The weather is getting colder and energy bills are rising, but is it really cheaper to leave the heating on low all day or should you only turn it on …
1 Dec 2022
Radiator vs electric heater – which is cheaper?
Personal finance

Radiator vs electric heater – which is cheaper?

We compare the costs, pros and cons of radiators and electric heaters and see which one will help keep your energy bill as low as possible.
28 Nov 2022
The pros and cons of smart meters – should you switch?
Personal finance

The pros and cons of smart meters – should you switch?

A smart meter can help you keep tabs on your energy usage, but is it better than a regular meter? We take a look at smart meters vs regular meters.
2 Dec 2022