What is happening to the Chinese stock market: is a recovery close?

The Chinese stock market is ready to restart, driven by the revival of the industrial sector and the country's internal economy.

There is optimism on the part of investors regarding the Chinese stock market, according to experts the year of the dragon could bring a revival of the economy and shares.

In fact, an increase in demand is estimated, especially in terms of travel, but also in terms of technology. Here are the experts’ predictions.

Chinese economy supported by the “dragon”

The Chinese New Year takes place on February 10th and with it, the beginning of the new zodiac year under the sign of the dragon, a sign that symbolizes strength and luck for the country. To be more precise, 2024, according to the Chinese calendar, will be the year of the Green Wood Dragon, the fifth creature of the zodiac and symbol of power, nobility, honor, luck and success.

According to tradition, the year of the Dragon is a year of change, ambition and at the same time protection for those who seek to change their lives. Consequently, according to tradition, the year of the Dragon is a year of change which is also reflected in the country’s economic, political and commercial decisions and choices.

However, putting aside the symbolic meanings and the zodiac, a relaunch of the Chinese economy is concretely expected in 2024, in response to the decline that occurred in 2023 and continued at the beginning of 2024. Especially in the real estate sector. Whose crisis, which began in 2021, has strongly influenced the Chinese economy in the last 30 months. However it is estimated that this crisis may have reached its conclusion.

End of the Chinese crisis?

According to experts, the Chinese real estate crisis is close to an end. And as a result, its negative influence on the Chinese economy is decreasing.

In this phase, China is experiencing the wealth effect, a revival of consumption due to greater liquidity among the Chinese in the face of an interruption in real estate purchases.

In other words, the real estate crisis has relaunched domestic consumption, consumption which remains lower than in most developed countries.

Electric mobility boom in China

One of the sectors that has seen strong growth is that of electric vehicles. Electric mobility in China, in 2023, grew by over 38%.

This growth is mainly due to prices, on average very low and accessible. Furthermore, these products are also appearing on foreign markets. Especially emerging markets, taking significant market shares away from historic brands that pay little attention to cheap electric mobility.

Increased demand for travel

The Year of the Dragon is a year of change, in which traveling is almost a traditional duty, and this is reflected in an increase in demand for travel. According to estimates, there could be a significant increase in travel in 2024, exceeding 300% compared to 2023.

According to initial estimates, the most popular destinations are nearby locations such as Japan, Malaysia, Vietnam, South Korea, Singapore. But there is no shortage of Europe and the United States among the destinations sought after by Chinese tourists.

Growth of the industrial sector

On the technological and industrial front, China continues to run at an increasing speed. Thus taking advantage of the advantage of its backwardness which allows it to access the most modern technological knowledge at reduced costs, resulting in a flourishing of innovation, which however has little impact on the weakness economy of the country.

According to experts who visited the Shanghai industrial fair, held in November 2023, the demand for automation is growing, especially in the automotive sector, robotics and industrial production processes in general.

And, according to representatives of companies such as Delta, Inovance, Fanuc, Yaskawa and Siemens, several Chinese companies have already gained significant market shares in the production of such solutions.

There is no lack of innovation on a technological level. China has in fact recently presented the first chip made with 7 nanometer technology. The effectiveness of which has not yet been appropriately tested, but it remains an important milestone that could have a significant impact on the Chinese economy of 2024.

Read also: The 7 Chinese stocks not to be missed

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