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

Who is the richest person in the world?
Entrepreneurs

Who is the richest person in the world?

Jeff Bezos, Bill Gates and Elon Musk are among the richest people in the world, but the top spot belongs to someone else.
7 Jun 2023
The building blocks for an income strategy: resilience, growth and diversification
Advertisement Feature

The building blocks for an income strategy: resilience, growth and diversification

Iain Pyle, Investment Manager, Shires Income plc
7 Jun 2023
Saving vs investing: which is better to help you make more money?
Personal finance

Saving vs investing: which is better to help you make more money?

Saving has become a more attractive option with interest rates hitting the highest levels seen in years, but if you’re prepared to take some risk inve…
7 Jun 2023
Look beyond familiar stockmarkets for reliable returns in rough times
Share tips

Look beyond familiar stockmarkets for reliable returns in rough times

A professional investor tells us where he’d put his money. This week: Giles Parkinson, managing director of global funds at Close Brothers Asset Manag…
7 Jun 2023

Most Popular

Best savings accounts – June 2023
Savings

Best savings accounts – June 2023

Interest rates have been creeping up - we look at the best savings accounts on the market right now.
6 Jun 2023
Nationwide to give £100 cash boost to customers
Personal finance

Nationwide to give £100 cash boost to customers

Nationwide Building Society is giving customers £100 as it reinvests profits. Dubbed the Nationwide Fairer Share scheme, we look at who is eligible.
22 May 2023
How much will it cost you to retire early?
Pensions

How much will it cost you to retire early?

The pre-state pension income gap means couples may need an extra £136,000 if they want to retire at 60 – can you afford to retire early?
6 Jun 2023