China’s onshore stocks have been resilient to global market volatility and turmoil, largely due to state-backed buying and solid economic data. Despite the US tariff war initiated by President Donald Trump in April, China’s CSI 300 Index has lost only 2.6% compared to a 6% decline for the S&P 500 index.
State-backed purchases of nearly 160 billion yuan worth of ETFs have helped stabilize market sentiment. Analysts attribute Beijing’s tight grip on proceedings through various means to this resilience. Unlike Hong Kong’s Hang Seng Index and Japan’s Nikkei 225, which have both lost around 7.5% and 3.8%, respectively.
According to He Kang, an analyst at Huatai Securities in Shanghai, “Clearly, we have a bottom here that is underpinned by state buying.” The market is now stuck in rangebound trading due to uncertainty surrounding tariffs, limiting its upside potential.
Source: https://www.scmp.com/business/china-business/article/3307285/why-chinas-onshore-stocks-have-weathered-global-turmoil-and-volatility