China’s stock market surges amid CPC promises

Decisions taken by the Politburo of the Chinese Communist Party usually influence the situation in the country before their implementation. For example, the market immediately reacted to the party’s promises to support economic growth. Since the Communist Party expects growth, it is highly likely to be seen, at least in its reports. A wave of optimism swept across the Chinese stock market. The surge was spurred by the results of the meeting held by the Politburo of the Chinese Communist Party. According to the approved plan, the local authorities will considerably support the economy. Both retail traders and tech companies benefited from the situation. A new promise about a rosy future was enough to make investors forget discouraging data and push up stocks, corporate bonds of national developers, and the yuan. The speech provided by the Communist Party members and the market reaction to it proved people’s confidence that China’s authorities are able to solve a bulk of problems, from the huge debts of local authorities to a slump in the housing market and a high youth unemployment rate. It is obvious that the current rally is of a speculative nature. While some investors are riding the wave, others are trying to find out whether the rise is stable or not. Traders who managed to resist the overall euphoria are concerned about whether the government will take real measures and be able to settle the gravest problems. The Communist Party’s announcement was a bit vague. Its leaders did not specify any significant stimulus measures. There is only hope that the measures will be reflected in the country’s policy in the second half of the year. It is obvious that some investors are disappointed, as they expected a faster economic recovery.