China's stock markets are weakening, India is growing: economic situation in comparison

China's stock markets are weakening, India is growing: economic situation in comparison

The stock exchanges of China and Hong Kong have faced significant challenges in recent years. While other international indices recorded solid gains, prices here fell year after year. In contrast, India is experiencing increased development and is becoming increasingly important worldwide.

The Chinese economy has been struggling to regain its former strength since the strict Corona measures ended at the end of 2022. The crisis in the real estate industry is putting additional strain on the economy, which is having a negative impact on the Communist Party's growth goal. Despite the government's efforts to stimulate the economy, the high levels of local government debt are also slowing the recovery. However, there were early signs of improvement in industrial production for January and February 2024, with an increase of 7.0 percent compared to the same period last year.

For 2024, China is aiming for a growth target of five percent, while experts are forecasting a GDP increase of 4.6 percent. The rating agency Fitch has lowered the outlook for China to “negative”, which was criticized by the Chinese side.

The stock market indices in China and Hong Kong have recently deterred investors, with losses over several years. The Shanghai Composite has lost 11.1 percent over the past three years, while the Hang Seng has seen a decline of 41.2 percent. In comparison, the US leading index Dow Jones Industrial gained 12.6 percent.

Experts at HSBC have calculated that a total of $4.8 trillion in market capitalization has flowed out of stocks in China and Hong Kong since 2021. China and Hong Kong were particularly affected by problems in the real estate sector. India, on the other hand, has proven to be an attractive alternative to China investments and the Indian stock exchange NSE is now the fourth largest in the world.

Indian indices recorded double-digit growth with the S&P CNX Nifty index and BSE SENSEX recording positive performance. India also saw a thriving IPO market, with 220 IPOs last year. International corporations such as Apple and Tesla are showing increased interest in India, both in terms of production and investments in the market.

The developments on the stock exchanges in China and Hong Kong as well as the increasing growth figures in India signal a shift in economic dynamics in the region. Investors may increasingly recognize the opportunities that India offers as an emerging market.