Finshots Daily Can China’s stock market ever deliver like India’s?
Aug 21, 2025
Explore the reasons behind China’s struggling $11 trillion stock market and its attempts at revival. Discover how China's investment-heavy model contrasts with India’s consumer-driven growth strategy. Dive into the constraints facing China's market, including the influence of state-owned enterprises and investor protection issues. Lastly, consider the implications of growing debt and the importance of stable policies for potential recovery.
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Market Designed For The State
- China's stock market was built as a financing tool for the state rather than to protect shareholders.
- That DNA kept SOEs dominant, led to weak governance, frequent dilution and low returns for investors.
IPO Boom Hurt Investor Trust
- China saw massive IPO activity and strict listing rules that encouraged fraud and delistings.
- Those patterns scared foreign capital and left investors burned, reducing long-term market trust.
High Savings Signal Market Distrust
- Chinese households save roughly 35% of disposable income versus about 4% in the US.
- High savings reflect market distrust and channel money into cash instead of equities.