China’s President Xi Jinping. REUTERS/Brittany Hosea-Small
As “Bloomberg” reports, China’s stock market regulators will meet with President Xi Jinping.
Markets have rallied on the news as it raises hopes that China will launch an aggressive rescue plan.
China and Hong Kong stock markets have lost nearly $7 trillion since peaking in 2021.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by an editor.
China’s stock investors may finally see a glimmer of hope: On Tuesday, the news agency reported “Bloomberg“ that regulators led by the China Securities Regulatory Commission (CSRC) will meet Chinese leader Xi Jinping. The plan is to inform the country’s top politicians about the situation on the markets, wrote “Bloomberg”, citing unnamed people familiar with the matter.
News of Xi’s personal presence – an unusual development – is fueling hopes of an aggressive plan to save markets. Since their peak in 2021, China and Hong Kong stocks have lost almost $7 trillion, or €6.5 trillion.
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Xi meets stock market regulator: share prices skyrocket
Benchmark indices in Hong Kong and China responded to the news with a rise. The Hang Seng Index in Hong Kong closed 3.5 percent higher on Tuesday, during the CSI 300 the blue chips closed over three percent higher.
On Wednesday, the Hang Seng rose as much as 1.7 percent before giving up gains to trade 0.3 percent lower at 3:36 p.m. local time. The CSI 300 was meanwhile one percentage point higher.
The two benchmark indices are still in the red so far this year. But the CSRC’s meeting with Xi raises hopes of “an imminent rescue plan” from Beijing to shore up China’s struggling markets, economists wrote Dutch bank ING on Wednesday.
China’s authorities have recently had one series of measures taken to support the markets. These included, among other things government-sponsored purchases in the markets and the Restriction on short selling.
Xi “does everything for the market”
But some analysts see these measures as less effective than Xi’s personal involvement in stabilizing markets – although it is unclear whether the meeting will result in new support measures, as Bloomberg classified.
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“The news that the nation’s No. 1 leader is holding a meeting is an encouraging development as it shows that the stock price plunge is close to breaking through the authorities’ comfort level,” said Li Weiqing, a fund manager at JH Investment Management in Singapore , told Bloomberg. “I feel like they’re doing everything they can, other than shouting to the market that now is the time to buy,” Li continued.
The CSRC did not immediately respond to a request for comment from Business Insider.
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