Economic Recession, Stock Market Weakness, and Real Estate Crisis Compound Challenges
Stock Market Support Measures Announced...But Doubts Remain Over Effectiveness
Amid growing concerns over China's economic instability, Chinese authorities have stepped in to support the stock market. Their plan includes lowering transaction costs and introducing long-term investment measures to boost investor confidence.
According to major foreign media on the 18th, the China Securities Regulatory Commission announced these stock market support measures. Starting from the 28th, transaction fees on Chinese stock exchanges will be reduced. The plan also includes supporting share buybacks and promoting the development of equity funds. Additionally, they stated that research will be conducted on extending stock market trading hours.
However, the China Securities Regulatory Commission drew a line regarding recent reports about a stamp duty reduction, saying that it falls under the jurisdiction of the Ministry of Finance. Earlier, on the 15th, Bloomberg reported that the Chinese government was discussing lowering the current 0.1% stamp duty on stock transactions to revive the sluggish stock market.
China shifted to a 'With COVID-19' policy earlier this year, but economic recovery remains distant. The stock market has shown weakness, and with the recent real estate crisis showing signs of spreading to the financial sector, the country is facing multiple adverse factors.
Questions have also been raised about the effectiveness of the newly announced stock market support measures. It remains uncertain whether these measures will have an impact if China's economy continues to underperform.
Meanwhile, amid growing concerns over the crisis in China's real estate industry, the Shanghai Composite Index and the Shenzhen Component Index closed down by 1.0% and 1.72%, respectively, on the day. The Hong Kong Hang Seng Index also fell 2.05% compared to the previous day.
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