China’s three major A-share indexes maintained an upward trajectory in Friday’s trading session, marking the benchmark Shanghai Composite Index’s return above 3,000 points and a recovery of all losses since the beginning of 2024. Analysts attribute this positive trend to effective support policies stabilizing the stock market and ongoing improvements in economic fundamentals.
Driven by a robust domestic consumption market, stable foreign trade, and increasing foreign investment, experts predict the stock market’s continued stability. Furthermore, they anticipate China’s economic growth to surpass 5 percent in the first quarter of 2024, laying a solid foundation for sustained economic recovery throughout the year.
The Shanghai Composite Index achieved an eighth consecutive day of gains, closing at 3,004.88 points with a 0.55 percent increase. The Shenzhen Component Index and the ChiNext Index, tracking China’s Nasdaq-style growth enterprises, rose by 0.28 percent and 0.02 percent, respectively.
With over 4,300 individual stocks experiencing gains and 141 reaching their daily limit, trading volume at Shanghai and Shenzhen stock markets reached 922 billion yuan ($128.1 billion). Notably, stocks associated with the Sora concept, robotics, and the auto industry chain led the market.
Analysts attribute the sustained uptrend in the A-share market to rising market confidence, fueled by key players such as the state-owned Central Huijin Investment increasing investment in the A-share market. Additionally, positive signals from the China Securities Regulatory Commission (CSRC) regarding regulatory reforms have bolstered market sentiment.
The CSRC, under the leadership of Chairman Wu Qing, has engaged in over 10 consecutive meetings to gather input on regulations, risk prevention, and high-quality development. Emphasizing an investor-centered approach, the CSRC vows to scrutinize enterprises seeking listings, penalize law violations, and enhance the quality of listed companies.
In response to economic indicators showing positive trends, especially during the Spring Festival holiday spending, experts anticipate economic growth above 5 percent in the first quarter of 2024. The Ministry of Culture and Tourism reported a 19 percent increase in trips during the holidays compared to 2019, and total spending rose by 7.7 percent.
As China’s foreign trade shows signs of recovery, with container shipments to the US increasing by 20 percent year-on-year in January, expectations for stable development in foreign trade and foreign investment further support economic optimism. Multinational corporations continue to express confidence in the Chinese market, reflecting an upward trajectory in foreign-funded enterprises.
Premier Li Qiang’s executive meeting of the State Council focuses on policies to attract and utilize foreign investment more vigorously, aligning with sustained growth seen in January, where new foreign-funded enterprises increased by 74.4 percent year-on-year.
Positive economic signals precede the upcoming annual two sessions, where China is set to establish development targets, including the GDP growth rate for 2024. In 2023, the number of Chinese cities with GDP exceeding one trillion yuan increased from 24 to 26, contributing to the overall dynamism and potential of China’s vast economic landscape.