Tens of thousands of frustrated Chinese investors are flocking to social media to vent about the country’s struggling stock market. China’s economy has seen significant volatility in the past few months and is currently experiencing a historic low.
Exasperated people from China are turning to Chinese-language social media accounts to express their frustration and anger with China’s struggling stock market. A post about protecting wild giraffes in Africa by a Chinese language account held by the U.S. embassy in Beijing attracted thousands of stock-market-related comments.
One user asked the U.S. government to help stock investors in China. Many more posts on the matter appeared online before they were apparently removed by censors, likely as part of China’s recent efforts to suppress criticism of the country’s economy.
Over the past three years alone, the Chinese stock market has lost $6 trillion in value amid a prolonged stock market slump. Even though Beijing has attempted to increase confidence in China’s stock market, the Shanghai Composite Index recently experienced a 6.2% fall, its largest weekly decline since October 2018.
The Shenzhen Component Index also fell by 8.1%, dropping by the largest margin in three years. Both the Shanghai Composite Index and the Shenzhen Composite Index lost more than 8% and 15% respectively since the beginning of the year. The blue-chip CAI 300 index, which comprises 300 top stocks listed in both Shenzhen and Shanghai, fell by 4.6% and registered its worst week since October 2022.
China’s economy is now in the midst of a record downturn characterized by extremely poor performance in the real estate sector, historic levels of youth unemployment, deflation and a spiraling birthrate. Furthermore, the International Monetary Fund predicts the nation’s gross domestic product will decrease to 4.6% in 2024 and around 3.5% in 2028 from 5.2% last year. With China ordering the liquidation of embattled and indebted property developer Evergrande in recent weeks, Chinese investors are becoming increasingly worried about the state of their country’s stock market.
The Chinese government and the People’s Bank of China recently announced that they would increase property developers’ access to commercial bank loans as part of efforts to increase confidence in China’s economy. According to Enodo Economics’ chief economist Diana Choyleva, the policies show that developers in a better financial position can expect to receive increased funding while unhealthy developers can expect a similar fate to Evergrande.
The creative way in which Chinese investors leveraged the U.S. embassy’s post on giraffes to vent about the downturn in their investments shows how much power social media providers such as Momo Inc. (NASDAQ: MOMO) can have in enabling people around the world to connect and share views.
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