China is distorting its stockmarket by trying to prop it up
State purchases of shares are bad enough, but other measures are far more destructive
![A shareholder looks at a stock board at a securities business hall in Hangzhou, Zhejiang Province, China](https://www.economist.com/cdn-cgi/image/width=1424,quality=80,format=auto/content-assets/images/20240615_FNP001.jpg)
Investors in China’s stockmarket have been doing handsomely this year. The Shanghai composite index has risen by 12% from a multi-year low in February, notwithstanding a recent drop. Equity analysts and state media alike are cheering. For Xi Jinping, China’s leader, the rally was a relief, since retail investors own at least 80% of the market. A previous rout hurt them badly, adding to anxieties about the country’s future. To many, the recovery reflected good governance and fortune.
This article appeared in the Finance & economics section of the print edition under the headline “In the stocks”
Finance & economics June 15th 2024
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