China’s Stock Market Shows Resilience
The Chinese A-share market continued its rebound on Thursday, with the Shanghai Composite Index closing above 3,200 points after a 1.16 percent gain. The Shenzhen Component Index climbed 2.25 percent and the tech-heavy ChiNext Index rose 2.27 percent. This positive trend is a testament to the market’s resilience and the country’s unwavering resolve against US coercion.
- More than 4,900 stocks in the market closed higher, with over 200 stocks reaching the daily limit or rising more than 10 percent.
- By sector, e-commerce, consumer electronics, baby products, and duty-free companies were among the top gainers.
- Many stocks surged sharply, leading to a comprehensive rebound, as announced countermeasures against US unilateral protectionist tariffs.
Yang Delong, chief economist at Shenzhen-based First Seafront Fund, shared his insights on the market’s recent performance:
“Many stocks surged sharply, leading to a comprehensive rebound. This came as China firmly announced countermeasures against US unilateral protectionist tariffs, showing unwavering resolve against US coercion.”
China has launched a raft of measures against the US tariffs, including lifting the additional tariffs on goods imported from the US to 84 percent, and adding a number of US companies to its export control list and its unreliable entity list. This shows the country’s commitment to defending its interests and protecting its domestic market.
- China has a complete industrial chain and abundant policy reserves, enabling the country to unleash domestic demand and counterbalance fluctuations in foreign trade.
- Institutional investors like insurance and social security funds are expanding their equity investment allocations. Listed companies are planning share increases and repurchases.
Yang Delong further noted that these actions have boosted confidence in the market:
“Meanwhile, institutional investors like insurance and social security funds are expanding their equity investment allocations. Listed companies are planning share increases and repurchases. All these actions boosted confidence in the market.”
While the US tariff policies have disrupted global capital markets, Chinese assets, with their strong resilience, are serving as the ballast of the market, according to several foreign-funded institutions.
- Meng Lei, a strategist at UBS Securities Co, noted that Chinese regulatory authorities have been promoting the entry of long-term funds into the A-share market since 2024.
- Meng estimated that in 2025, the Chinese stock market is expected to witness net capital inflows from various sources.
- Specifically, insurance companies are projected to bring in 1 trillion yuan ($136 billion), public funds are likely to contribute 590 billion yuan, and the social security fund is anticipated to inject 120 billion yuan.
Meng Lei, a strategist at UBS Securities Co, shared his views on the market’s outlook:
“Since 2024, Chinese regulatory authorities have been promoting the entry of long-term funds into the A-share market. The long-term funds, with their stable management style and long investment horizon, can be the ballast of the market and further stabilize it.”
Meanwhile, Liu Jinjin, chief China equity strategist at Goldman Sachs, wrote in a note that as external risks intensify, domestic-centered and policy-driven investment opportunities emerge. The recent rally demonstrated the market’s confidence that the Chinese economy will not be overly affected by the tariff war. Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, shared his insights:
“For the same reason, foreign investors are bullish on China. This is because China has a relatively stable market and stable policy expectations. Moreover, the growth in consumption and investment is also clear.”
Between 9 am on Wednesday and 8 am on Thursday, 15 more centrally administered state-owned enterprises announced shareholding increases and repurchases, a display of optimism about the capital market that strengthened investors’ confidence. China’s financial market regulators and the state-backed “national team” have acted swiftly to ensure stock market stability. Central Huijin, a state-owned investment company, has emphasized its commitment to acting as a stabilizer in the market, pledging to “step in decisively when necessary to curb abnormal fluctuations.”
| Source | Outlook |
|---|---|
| Meng Lei, strategist at UBS Securities Co | Long-term funds will stabilize the market |
| Liu Jinjin, chief China equity strategist at Goldman Sachs | Domestic-centered and policy-driven investment opportunities emerge |
| Dong Shaopeng, senior research fellow at the Chongyang Institute for Financial Studies | Foreign investors are bullish on China due to stable market and policy expectations |
China’s Measures Against US Tariffs
China has launched a range of measures against the US tariffs, including lifting the additional tariffs on goods imported from the US to 84 percent, and adding a number of US companies to its export control list and its unreliable entity list.
- These measures demonstrate China’s commitment to defending its interests and protecting its domestic market.
- The country’s complete industrial chain and abundant policy reserves enable it to unleash domestic demand and counterbalance fluctuations in foreign trade.
Meng Lei noted that Chinese regulatory authorities have been promoting the entry of long-term funds into the A-share market since 2024, with the long-term funds expected to play a key role in stabilizing the market. Meng estimated that in 2025, the Chinese stock market is expected to witness net capital inflows from various sources, including insurance companies, public funds, and the social security fund.
- Insurance companies are projected to bring in 1 trillion yuan ($136 billion), public funds are likely to contribute 590 billion yuan, and the social security fund is anticipated to inject 120 billion yuan.
Liu Jinjin, chief China equity strategist at Goldman Sachs, wrote in a note that as external risks intensify, domestic-centered and policy-driven investment opportunities emerge. The recent rally demonstrated the market’s confidence that the Chinese economy will not be overly affected by the tariff war, and foreign investors are bullish on China due to its stable market and stable policy expectations.
Key Takeaways
* Chinese assets, with their strong resilience, are serving as the ballast of the market, according to several foreign-funded institutions. * Many stocks surged sharply, leading to a comprehensive rebound, as announced countermeasures against US unilateral protectionist tariffs. * China has a complete industrial chain and abundant policy reserves, enabling the country to unleash domestic demand and counterbalance fluctuations in foreign trade. * Institutional investors like insurance and social security funds are expanding their equity investment allocations, and listed companies are planning share increases and repurchases. * The long-term funds, with their stable management style and long investment horizon, can be the ballast of the market and further stabilize it. * Foreign investors are bullish on China due to its stable market and stable policy expectations.
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