Stocks on the Chinese market are experiencing significant growth, once again attracting the attention of investors worldwide. According to TradingView, the Shanghai Composite index has risen by 26% since April. The total market capitalization of listed companies has surpassed 100 trillion yuan for the first time, which is approximately $13.92 trillion.

Stocks in China reach new highs

Other indexes have also performed well. The Shenzhen Component increased by 31% since April, closing the day at 11,926 points. However, the biggest gain was recorded by the ChiNext Index, which focuses on growth-oriented companies. Its value rose by 49% over the same period to 2,618 points. More than 4,000 companies benefited from this growth, with the best results achieved by firms in brokerage, fintech, artificial intelligence, and new materials.

Unlike previous growth waves, the current movement occurs with low volatility. According to V-Lab, the 10-day historical volatility of the CSI 300 index is at annual lows, indicating more deliberate investor positions. This development supports the concept of gradual growth, which is also preferred by Beijing, as it strengthens consumption and household wealth in the long term.

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Growth supported by government and economic strength

The growth of Chinese stocks is largely the result of political measures and the broader economic environment. Households are gradually moving towards stocks as low interest rates reduce returns on savings. However, there is still no speculative frenzy that often accompanies sharp price increases.

According to a report by Finbold, the main driver of optimism is government measures supporting innovation and market stability. Confidence is also reinforced by the performance of the economy. In the first half of the year, China recorded a GDP growth of 5.2%, according to TradingEconomics.

A historically significant moment was September 2024, when the government introduced extensive stimuli, including rate cuts and an injection of $114 billion into the stock market. At that time, economic slowdown, real estate challenges, and geopolitical tensions created uncertainty.

The current environment suggests that Chinese stocks may be at the beginning of a more sustainable growth phase, although questions about its durability remain.