See: The ups and downs of the Chinese economy

China’s policies kept its economy stagnant, underdeveloped, centrally managed, highly inefficient and isolated from the rest of the world before economic reforms and trade liberalization began some 40 years ago. But, since its opening to foreign trade and investment and the implementation of free market reforms in 1979, it has been among the fastest growing economies in the world, with real annual growth in gross domestic product ( GDP) by 9.5% on average through 2018. , which the World Bank said was “the fastest sustained expansion of such a huge economy in history.”

China has quadrupled its average GDP every eight years and lifted around 800 million people out of poverty. The country has even overtaken the United States as the world’s largest economy, manufacturer, merchant of goods, and holder of foreign exchange reserves (on a purchasing power parity basis). As a result, China has become one of America’s most important trading partners and is the United States’ largest merchandise trading partner, largest source of imports, and third-largest export market. China is the largest foreign holder of U.S. Treasuries, which further helps pay down federal debt and keep U.S. interest rates low.

China’s economy has matured and its real GDP growth has slowed significantly, from 14.2% in 2007 to 6.6% in 2018, with the International Monetary Fund (IMF) predicting 5.5% growth in by 2024. The slowdown in economic growth has been accepted by the Chinese government, which has even dubbed it the “new normal” and recognized the need for China to adopt a new growth model that relies less on the fixed investment and exports and more on private consumption, services and innovation to stimulate economic growth. Such reforms are necessary for China to avoid falling into the “middle income trap”, which occurs when countries reach a given economic level but cannot adopt new sources of development, such as innovation, and lead to a significant drop in economic growth rates.

According to HSBC, China has never been so cheap compared to India, which has increased its position in the world’s second largest market from “neutral” to “overweight”. HSBC has joined a series of other brokerage firms, including UBS, Nomura and Jefferies, in increasing their exposure to China, citing diminishing hurdles and attractive values.

Ahead of the November 15 virtual summit between US President Joe Biden and his Chinese counterpart Chinese President Xi Jinping, Chinese markets were down. The cleantech ecosystem was hit hard by Elon Musk’s Tesla stock sales, as electric, solar and wind vehicles were all down, as were semiconductors.

On the announcement of a new Covid-19 vaccination from Cansino (6185 HK), Health had a strong day in both China and Hong Kong stock markets, gaining +3.84% in Hong Kong and +9, 87% in China.

Despite extraordinarily huge global market capitalizations by international standards, Chinese stock markets are still relatively young and play a smaller role than in the United States. Since equity financing can be an important part of economic growth, China benefits greatly from the continued expansion of the market. Giving better access to foreign investors is a step towards developing the country’s financial markets, but the main challenge will be overcoming investor skepticism.

Hong Kong media reported that the Beijing Stock Exchange, which launched trading on Nov. 15, has seen trading volume decline more and more. On November 23, the Beijing Stock Exchange’s one-day trading accounted for only one-third of the remaining amount, a loss of about 67% of the transaction amount from the 15th.

On November 22, in response to renewed downward pressure on the Chinese economy, Premier Li Keqiang called a meeting of local officials in Shanghai. At the same time, the General Office of the State Council of the Communist Party of China issued a document calling for greater efforts to help small and medium-sized enterprises and encourage local governments to organize relief funds. A few days ago, the International Monetary Fund (IMF) released its annual report on the Chinese economy and pointed out that the Chinese economy “downside risks are increasing”.

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