China's stock market in free fall: lowest level since 2019 due to slow growth, real estate problems and geopolitical tensions.

China's stock market in free fall: lowest level since 2019 due to slow growth, real estate problems and geopolitical tensions.

China's stock market has fallen to its lowest level since 2019. The CSI 300 Index fell by up to 1.3 percent to around 3,463 points, reports the “Financial Times” (FT). This crash is due to several factors, including slow growth, problems in the real estate sector and geopolitical tensions, particularly the deteriorating relationship with the US. China's government has already taken measures to boost the stock market, but experts believe the impact will be limited.

Worse relations between the US and China

One of the reasons Chinese stocks are selling off is pressure from unpaid dollar debts. According to the daily, global funds have also felt increasingly uncertain due to deteriorating US-China relations. Washington is said to have put pressure on asset managers who have invested in certain Chinese companies.

China's measures to strengthen the stock market

To boost the stock market, sovereign wealth fund Central Huijin invested over RMB 477 million (around €61 million) in four state-owned banks earlier this month, the FT reports. In addition, many companies have announced share buyback plans in the last week. Goldman Sachs expert Si Fu believes these measures will have a limited impact on the stock price. Nevertheless, the smaller positions are expected to limit the extent of further outflows. Monetary policy easing and the current positive market momentum could boost the stock market in the next three months.

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