China‘s stock market experienced a significant drop on October 9, following a sharp increase in late September due to the Chinese communist regime’s stimulus policies. The indexes of China’s three major exchanges, Beijing, Shanghai, and Shenzhen, continued to fluctuate on October 10.
The benchmark CSI 300 index, which includes the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, closed down by 7.1 percent. This marks the largest single-day drop since early 2020 when the COVID-19 pandemic began.
Nearly 5,000 stocks on Shanghai, Shenzhen, and Beijing’s stock markets fell during this period. More than 3,000 stocks experienced a decline of over 9 percent and 854 companies reached their daily loss limit.
The Shanghai Composite Index fell by 6.62 percent while the Shenzhen Component Index dropped by 8.15 percent. The ChiNext Index saw an even larger decline of 10.59 percent.
In response to these market conditions, China’s central bank announced before the stock market opening on October 10 that it would immediately implement its “securities funds and insurance companies swap facility” to encourage institutions to invest in the stock market. As a result of this announcement, there was a temporary rise in the Shanghai Composite Index of nearly three percent before it fell again in the afternoon.
Since late September when approximately $113 billion was injected into China’s capital market by the Chinese regime as part of its stimulus policies for economic recovery from COVID-19 impacts; major funds in both Shanghai and Shenzhen began withdrawing from these markets.
According to Chinese media reports from October eighth alone recorded net outflows totaling around $24 billion (169.8 billion yuan). Over one hundred companies have announced plans to reduce their holdings during this time period with more than thirty listed companies announcing similar plans just on that day alone.
Sun Kuo-hsiang who is an international affairs professor at Nanhua University located within Taiwan told The Epoch Times that he believes these fluctuations within China’s stock exchange demonstrate how new rounds involving economic stimulus policies implemented by Communist Party officials have not achieved desired results as expected originally.