Despite ongoing economic headwinds, equity markets in China have experienced a significant rally in 2025. On August 25th, the Shanghai Composite Index reached a decade-high, climbing 36% from the beginning of the year. This performance has outpaced major global benchmarks, including the U.S. S&P 500 and broader international indices. Historically, Chinese investors have favored overseas markets due to underwhelming domestic returns and capital controls limiting offshore investments. However, this year’s surge suggests shifting sentiment, possibly driven by policy support, improved market liquidity, or renewed confidence in local equities amid broader macroeconomic uncertainty. n
— news from The Economist
— News Original —
Even as China’s economy suffers, stocks soar. What’s going on?
For Chinese investors, the grass is almost always greener elsewhere. The country’s stockmarket chronically underperforms, meaning that local punters look to bourses in, say, America or Japan, and devise ways of getting cash around China’s capital controls. But this year is different. The Shanghai Composite, an index for China’s domestic market, hit a ten-year high on August 25th. It is up by 36% since the start of the year, ahead of both America’s S&P 500 and global indices.