In a bid to navigate the ongoing property crisis and the deepening crisis of confidence in China’s economy, a well-known Chinese influencer has called on his fellow citizens to consider investing in the mainland stocks. Hu Xijin, former editor-in-chief of the hardline tabloid Global Times, took to his Weibo social media account to share his thoughts on the matter.
As expectations for a massive expansion in the housing market remain low, Hu noted that many individuals are uncertain about where to allocate their funds, aside from traditional bank deposits. He emphasized that the stock market should be viewed as a key destination for investments.
However, recent months have witnessed Chinese mainland stocks performing poorly, making them among the world’s worst performers. The initial reopening rally following the pandemic gradually gave way to a weakening economic recovery, further eroding investors’ confidence. Concerns over this decline were highlighted when a state-owned newspaper issued a criticism to Goldman Sachs Group Inc. research after the Wall Street bank advised selling shares of Chinese banks.
Hu himself has taken a proactive stance on investing in the stock market. Last week, he announced the opening of a local stock trading account with an initial investment of 100,000 yuan ($13,828). This move attracted attention and generated discussions among investors. Expressing his views on the matter, Hu emphasized the need for China to seriously develop the stock market as an investment venue commensurate with its economic weight. He suggested that rebuilding the stock investment culture would require active participation from the government, enterprises, investment institutions, and ordinary citizens.
Hu’s advocacy for investing in the stock market is gaining attention, particularly due to his association with the Chinese government. Observers speculate that his actions and statements may indicate a broader sentiment within the government, possibly suggesting the introduction of national economic stimulus policies. It is likely that large institutional investors in China are also following a similar approach, potentially providing technical support to the stock market. Recent market performance reflects this, as mainland China, predominantly owned by domestic investors, outperformed Hong Kong, which is predominantly owned by foreign investors.
As China continues to grapple with property woes and a crisis of confidence, the stock market appears to offer an alternative investment avenue for individuals seeking profitable opportunities. Hu Xijin’s influential voice, combined with the potential backing of the Chinese government, may further encourage citizens to explore the stock market as a means to secure their financial futures.