Chinese government struggles to shake off stock market gloom
- Nervous investors reluctant to risk further losses after benchmark stock index sees heavy falls this year
Lu Yushan, a retired salesman, has advice for investors in China’s slumping stock market: Sell.
Lu’s shares soared over the past decade. But the 65-year-old cashed out this year, driven away by plunging prices, insider trading scandals, a cooling economy and a tariff war with Washington.
“Investors should get out,” said Lu, watching flickering prices on a wall-mounted display at a Beijing brokerage. “I am here just for fun and not to make money.”
President Xi Jinping’s government is struggling, with limited success, to dispel such gloom and talk stock prices back up with promises of tax cuts, more bank lending and a media campaign led by its economy tsar.
The benchmark Shanghai Composite Index dropped 30 per cent from January through to mid-October.
Prices fell so far that China gave up its status as the No 2 market by share value after the United States and dropped to third place behind Japan. The index has gained 5 per cent since late October but is the world’s worst performer this year.