Sinking profits turn China’s $3.5 trillion stock rout into trap
Further darkening the outlook is the growing perception that leaders are in no rush to jump-start an economy that is slowing but at a tolerable speed.
China's equities market has plummeted $3.5 trillion in value since May, according to compiled data. The once-booming market has now entered a bear market, with investors struggling to find any relief from the persistent pessimism. Last week, the onshore benchmark CSI 300 Index continued to slide, bringing the technology sector in Hong Kong perilously close to erasing all the gains it had made since Beijing unveiled a massive stimulus package two years ago.
The root of the market's downturn lies in a troubling trend: a prolonged slump in consumption and a race to the bottom mentality among businesses. This combination has been relentlessly eating away at earnings across various industries, from traditional banks to electric car manufacturers and AI model developers. As the situation worsens, there's an increasing perception that Chinese leaders are not in a hurry to inject fresh stimulus into the economy.
They seem content with the current sluggish growth, even if it's not fast enough to spark significant concern.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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