China’s stock market has soared to a record high of more than $10tn as the world’s second-largest economy continues a rapid bounceback from the coronavirus pandemic.
The total value of all company shares listed on the Shanghai and Shenzen markets rallied to hit $10.08tn (£7.7bn) on Wednesday, according to figures compiled by Bloomberg.
The rebound comes as the Chinese economy recovers steadily from a record drop in output earlier this year when Covid-19 first spread, driven by stimulus measures unleashed by Beijing to cushion the economic fallout.
The recovery in shares has now lifted the market capitalisation of Chinese equities higher than the previous $10.05tn peak reached in June 2015, just before regulators imposed restrictions on risky trading practices which led to a crash in share prices.
China’s benchmark CSI 300 Index, which tracks both the Shanghai and Shenzen markets, has risen by more than 17% so far this year, compared with an almost 9% gain for the S&P 500 index in the US. The FTSE 100 index of leading UK company shares remains down by more than 20%.
China became one of the few major global economies earlier this year to avoid a technical recession – two successive quarters of economic contraction. Growth rapidly recovered in the three months to the end of June after the relaxation of lockdown measures.
As the first country hit by Covid-19, and after imposing tough controls on business and social life earlier this year to contain the spread of the virus, China’s gross domestic product shrank by a record 6.8% in the first quarter. This was the first such contraction since Chinese quarterly economic records began in 1992.
China’s economy grew by 3.2% in the second quarter, and is expected to have grown at a faster pace in the third quarter.
Chinese trade with the rest of the world surpassed expectations in September – imports rose 13.2% compared with the same month a year ago while exports increased by 9.9%.
However, economists warned that consumer spending and tourism remained below normal during China’s “golden week” national holiday, reflecting the continuing effect of coronavirus.
According to data from thee country’s ministry of culture and tourism, 637 million domestic tourists travelled around China during the eight-day break, generating 467bn yuan (£53.2bn) in revenue for the tourism sector.
The numbers travelling and the money spent were 79% and 70% of the levels seen last year, said Miguel Chanco, senior Asia economist at the consultancy Pantheon Macroeconomics.
“China’s Golden Week holiday fell flat this year from an economic standpoint, underscoring the lingering pressure on households and pouring cold water on the economy’s supposed V-shaped recovery,” he added.