Weak stock market an ‘embarrassment’ for China, says Beijing adviser

China’s stock market, whose indices are among Asia’s biggest losers for the past four quarters, is an embarrassment to the country, the chairman of the country’s biggest commerce guild and a senior government adviser said on Tuesday.

“China’s stock market has diverged completely from the country’s economic fundamentals,” said Huang Mengfu, chairman of the All-China Federation of Industry and Commerce and a former vice-chairman of the China People’s Political Consultative Conference (CPPCC), during Caijing’s annual conference in Beijing. “It is so embarrassing that the total [value of the] stock market of China” is equivalent to the market capitalisation of seven Apple Incs, he told an audience of bankers and business executives.

Top China adviser tries to boost battered confidence in economy after weak stocks, financial data

China’s Shanghai and Shenzhen exchanges are capitalised at a combined US$6.59 trillion, compared with Apple’s market value of US$921 billion.

Even though China’s economy is now the second-largest in the world and still boasts one of the fastest growth rates among major economies, its stock market has lost about 50 per cent of its value since a peak in the summer of 2015, with half that fall occurring in 2018. In the process, investors have lost trillions of yuan.

The Chinese stock market’s weakness has also been used by US President Donald Trump as an indication of the Chinese economy’s vulnerability, and to say that it will not be able to withstand a protracted trade war with the United States.

Huang blamed the stock market’s weakness on lack of confidence among Chinese investors. “ … if the US stock market falls, China follows. But when the US stock market moves up, the China market still holds steady, or just inches up slightly,” he said.