Even as China’s economy suffers, stocks soar. What’s going on?

尽管中国经济遭受打击,但股市却飙升。这是怎么回事?

Economist

2025-08-27

5 分钟
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  • For Chinese investors, the grass is almost always greener elsewhere.

  • The country's stockmarket chronically underperforms,

  • meaning that local punters look to bourses in, say, America or Japan,

  • and devise ways of getting cash around China's capital controls.

  • But this year is different.

  • The Shanghai composite, an index for mainland stocks, hit a ten-year high on August 25th.

  • In dollar terms, it is up by 17% since the start of the year, ahead of both America's S&P 500 and global indices.

  • At the same time, China's economy is suffering from overcapacity,

  • which has induced a widespread race-to-the-bottom mentality.

  • The country's great commercial and technological achievements,

  • such as its electric-vehicle and solar industries,

  • are among those suffering most from an overabundance of companies competing for the same markets.

  • Even BYD, China's most successful EV firm, is struggling to pay its suppliers.

  • Losses at many of the country's biggest solar companies grew in the first six months of the year.

  • Ordinary folk are feeling the pain, too: China's delivery drivers have been caught in price wars.

  • The sensational stockmarket performance therefore comes with an uneasy undercurrent.

  • Since the start of the year the Chinese state has sought to buoy sentiment,

  • capitalising on accomplishments such as a breakthrough artificial-intelligence model built by DeepSeek, a startup,

  • and the wild success of "Ne Zha 2", a locally produced animated film.

  • Another source of positivity has been the state's crackdown on oversupply,