Chinese stock markets in free fall: analysis from financial experts and new stabilization measures

Chinese stock markets in free fall: analysis from financial experts and new stabilization measures

According to a report by www.deraktionaer.de,

The Chinese stock markets have been in free fall for around a year now. Despite several liquidity measures, the government has so far failed to stop the crash. On Tuesday morning, Premier Li Qiang announced new "powerful" steps to stabilize markets. China plans to mobilize about 2 trillion yuan ($278 billion), mostly from the offshore accounts of Chinese state-owned companies. This is intended to be part of a stabilization fund to buy stocks domestically via the Hong Kong stock exchange connection.

Given the Chinese government's new "powerful" move to stabilize stock markets, the question is whether these measures will be enough to end the slide. The Chinese real estate crisis, depressed consumer sentiment and reduced confidence among local businesses after years of volatile politics are putting strong downward pressure on the economy and financial markets. The increased measures involve the mobilization of two trillion yuan, mainly from the offshore accounts of Chinese state-owned companies. This shows that Beijing attaches great importance to stopping the sell-off on its home markets.

The new stimulus figure appears to be a bright spot for China's stock markets, and from a financial perspective, this could lead to positive effects in the short term. Stocks of companies like BYD and Alibaba could benefit from this announcement, as can also be seen in the positive reaction of the Hang Seng Index. However, the impact on the market is temporary and long-term stability is not yet assured. The success of these measures and their impact on the market depend on whether they can sustainably strengthen the trust of investors and entrepreneurs. It is important to continue to monitor developments in order to make informed investment decisions.