ASIATODAY.ID, JAKARTA – China’s stock market entered its worst period this week, with various sectors experiencing a decline due to an economy that has not yet recovered after the pandemic and the shock of the property crisis.
Quoting CNN, Saturday, February 3 2024, even though the government has made various efforts to increase investor confidence, the stock market still recorded a total loss of $6 trillion in the last three years.
It is estimated that next week capital outflow or foreign funds from the stock market will continue.
The Shanghai Composite index fell 6.2 percent, its biggest weekly loss since October 2018, while the Shenzhen Component index slumped 8.1 percent, its biggest drop in three years.
In total, the Shanghai Composite and Shenzhen Component indices have weakened more than 8 percent and 15 percent respectively since the beginning of the year.
China’s blue-chip CSI 300 index, which consists of 300 major stocks listed in Shanghai and Shenzhen, also fell 4.6 percent. This realization is the worst week since October 2022. China’s economy is indeed gray. The decline in demand in the real estate market has reached the weakest level on record.
Apart from that, high unemployment, deflation and a rapidly falling birth rate are some of the problems that are detrimental to the country with the second largest economy in the world.
The International Monetary Fund (IMF) estimates China’s economic growth will slow to 4.6 percent in 2024, one of the weakest performances in decades.
This economic growth is down from the realization throughout 2023 of 5.2 percent. China’s economy is expected to continue to decline to only 3.5 percent in 2028.
The biggest squeeze on China’s real estate market will begin this week, after a Hong Kong court ordered the liquidation of Evergrande, China’s property giant and the cause of the country’s real estate crisis.
The court order raises a number of questions about the future of China’s booming business and the fate of other property developers.
Coupled with other weak economic data, investor confidence in China is increasingly falling. (ATN)
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