A great day for the Chinese stock market, amid anxiety - SupChina

A great day for the Chinese stock market, amid anxiety

Part of the daily SupChina newsletter. Subscribe for free

“China’s beaten-down stock market had its best day in more than two and a half years on Monday,” reports CNN: “The benchmark Shanghai Composite index surged more than 4% after a rare concerted intervention by senior officials to talk up the country’s struggling economy and markets.”

The “rare concerted intervention” began last week with expressions of confidence in the stock markets and the real economy from four key economic officials — Liú Hè 刘鹤, Guō Shùqīng 郭树清, Yì Gāng 易纲, and Liú Shìyú 刘士余.

Andrew Polk, co-founder of political and economic research house Trivium, tweeted that the foursome’s rare cheerleading “speaks volumes about how high the level of anxiety is right now.”

I tend to agree. Polk’s tweet reminds me of an old truism in China: You can only be sure something is actually happening when the government denies it.

Which is why this headline from CNBC on the stock market rally is perhaps a better summary of the real situation than CNN’s focus only on the good news: Chinese stocks surge, but looming uncertainties could drag markets down again. Even if the stock markets remain healthy after this propaganda-fueled bounce — I need hardly say — their performance is not a reliable indicator of the real economy.

Jeremy Goldkorn

Jeremy Goldkorn worked in China for 20 years as an editor and entrepreneur. He is editor-in-chief of SupChina, and co-founder of the Sinica Podcast.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.