China’s army of 220 million retail investors relive 2015 nightmare as stocks dive
- China’s retail investors, who sit on US$20.8 trillion of savings, have few options as a property crisis lingers and meagre interest rates offer poor compensation
A fresh wave of selling in Chinese stocks has sent shivers down the backs of the 220-million-strong army of retail investors in the world’s second biggest-market, as memories are revived of the implosion a decade ago, which shaved a third of the aggregate valuations.
In the world’s second-biggest economy, where investors are sitting atop a US$20.8 trillion savings pile, options are limited as a five-year-old property crisis continues to rage with savings deposits earning rock-bottom rates.
A 3.7 per cent decline in the CSI 300 Index last week has taken to 7.6 per cent its loss from this year’s high in May, as pessimism grew after a high-stakes Communist Party’s third plenum offered little by way of policy support. The resumption of the downturn in stocks is a setback for those hoping for a sustained turnaround after a flurry of state interventions over the past year.
Hu Xijin, who has more than 20 million followers on social media platform Weibo and was the editor-in-chief of state tabloid Global Times before retiring in 2021, has joined the millions who are nursing losses from the US$1.3 trillion blowout.
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In a social media post last week, Hu revealed that he had paper losses of 100,000 yuan (US$13,792) in his 700,000 yuan stock portfolio.