**China’s Stock Market Experiences Violent Fluctuations, Rumors Swirl of Xi Jinping Directed Rescue Efforts**
China’s stock market has been in a state of tumultuous fluctuation in recent weeks, with rumors circulating that President Xi Jinping personally directed efforts to rescue the market. Amidst this turmoil, the chairman of the China Securities Regulatory Commission has been replaced, and officials have taken extreme measures to restrict the sale of stocks by institutions. Analysts believe that this official approach may not last long, creating an opportunity for retail investors to escape.
The pre-Chinese New Year period from February 9 to February 18 saw the stock market closed for 10 days, providing a brief respite for the 200 million Chinese investors. However, in the three weeks leading up to the market closure, the stock market witnessed fierce battles between bulls and bears, leading to extremes in stock performance.
On January 22, the Shanghai Composite Index hit a four-year low of 2,735 points, prompting intervention by the CCP’s “national team” to bolster the market. Despite this effort, the stock index dropped again in the subsequent weeks, reaching a new low of 2,635 points on February 5. The widespread decline led to over 5,200 stocks across major Chinese markets experiencing collective falls, with more than 1,300 stocks hitting their daily limit.
The significant downturn in the stock market has had severe repercussions, with an estimated $7 trillion in market value evaporating since the market’s peak in 2021. This translates to an average loss of $35,000 per shareholder among China’s 200 million registered investors.
In the midst of the market crisis, many Chinese investors have expressed frustration on social media platforms, even turning to the official Weibo accounts of foreign embassies, such as the U.S. and India, to voice their concerns and pleas for help.
Amidst this chaos, Beijing has taken decisive action by replacing the chairman of the China Securities Regulatory Commission and implementing stringent restrictions on institutional selling. Wu Qing, a long-time official at the China Securities Regulatory Commission, has been appointed to lead the organization, while additional measures have been put in place to restrict institutional selling.
These moves have raised concerns among experts and analysts, with some questioning the sustainability of the official approach and predicting eventual liquidity constraints. Despite a rebound in the stock index ahead of the Chinese New Year, public confidence in China’s stock market remains low, with skepticism about the long-term prospects for recovery.
As Chinese investors embark on the lunar new year, the tumultuous state of the stock market has become a central theme in public discourse, with many expressing doubts about the future of their investments.
Whether the official measures will be effective in stabilizing the market or whether this is a temporary reprieve amidst larger economic challenges remains to be seen.
The chaotic and uncertain state of the Chinese stock market continues to unfold, leaving many investors and observers grappling with the implications of the ongoing turbulence.
Editor in charge: Lian Shuhua#