China’s domestic stock market is now a $10 trillion marketplace since the crash of 2015, according to the top news agencies.
The market, second in the world, saw a low in March after the spread of Coronavirus globally. Since then $3.3 trillion market capitalization has been added with policy support from Beijing.
The policy reformation includes trading support, eased rules, and a stronger currency. A report from July shows that the $10 trillion milestone was nearly touched by the Chinese stocks in July.
“It’s possible China’s market value can expand faster now that market reforms like the registration-based IPO system are in place.”
– Hao Hong
A euphoric eight-day rally happened in July fueling worries of a financial bubble. Currently, the market is very close to the all-time high market capitalization claimed by Bloomberg on Monday.
The Bloomberg news also stated that the $10.04 trillion total market size makes Chinese stock markets the second in the world just behind the $38.3 trillion U.S stock market.
According to Hao Hong, a chief strategist for Bocom International in Hong Kong, “It’s a meaningful number, especially coming after a pause in the stock rally.”
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China’s deadly Stock Market Crash in 2015
China’s stock market endured a record crash in 2015 where it lost half of the market value. The crash was a part of a bigger bubble which can be linked to a loosening regulation since 2010.
According to Vox, China’s stock market crash had similarities in nature with the U.S market crash in 2008. The risky way of investment created the path for a record-breaking meltdown in China.
However, there was a boom before the market crash in 2015. Some sources confirmed that China crossed the brokerage money borrowing by leveraging 1.2 trillion yuan, the highest since late 2015.
The unhealthy exercise of investing in borrowed money and retail rush created the boom in Chinese markets followed by a crash.
However, the recent market rally is considered by the Chinese Communist Party as a “zhongguomeng” or Chinese dream to the revitalization of the country.