China’s retail investors return to stocks as other assets slump

Retail investors in China are back in the market, not because they suddenly love risk, but because everything else they used to trust is falling ￰0￱ CSI 300 Index has jumped over 25% since April, pushed by excitement around AI and Donald Trump’s softer tone from the White ￰1￱ the reason ordinary Chinese households are eyeing stocks again? ￰2￱ other place they could put their savings is turning to ￰3￱ doesn’t ￰4￱ are ￰5￱ is a ￰6￱ products are ￰7￱ now, retail investors, who’ve mostly been watching from the sidelines, are stepping ￰8￱ Bratton, who leads cash equity research in Asia Pacific at BNP Paribas Exane, said, “The pressure to save is fading.” He pointed at China’s $23 trillion in household savings as a reason his firm is “structurally positive” on local ￰9￱ now, the rally is mostly being carried by institutional players and foreign money, based on Goldman Sachs ￰10￱ people like William are betting on retail buyers to drive the next ￰11￱ Chase thinks $350 billion from households will move into China’s stock market by the end of ￰12￱ cut rates, bonds disappoint, homes lose shine Five-year fixed savings accounts at the country’s top four banks are paying around 1.3%.

That’s down from 2.75% in ￰13￱ you go for demand deposits, it’s worse—0.05% a ￰14￱ once-popular Tianhong Yu’E Bao money-market fund, managing around $110 billion, is returning just 1.1%, half of what it gave investors earlier this ￰15￱ aren’t making up for it ￰16￱ people holding Chinese government debt have seen more red than green this ￰17￱ might be climbing, but they’re still ￰18￱ 10-year benchmark sits at 1.80%, compared to a five-year average of 2.58%. On top of that, the government is taxing interest on bonds again. It’s just one more reason for people to pull ￰19￱ was once the golden ￰20￱ ￰21￱ sector is four years deep into a ￰22￱ families already own more than one ￰23￱ another doesn’t make sense—especially when developers can’t even finish what they’ve already ￰24￱ Xi Jinping has made it clear that “houses are for living, not for speculation.” That message has ￰25￱ International Corporation Corp says real estate now makes up 58% of household wealth, down from 74% in ￰26￱ the same period, exposure to stocks and high-risk financial products rose to 15%, up from 9%.

Wealth products slow down, foreign stocks out of reach Wealth management products (WMPs) are tanking ￰27￱ average annualized return on both fixed-income and mixed-strategy WMPs is now under 3%, based on recent performance. That’s two straight years of weak ￰28￱ insurance is no ￰29￱ of Ping An Insurance’s universal policies used to give 4.3% ￰30￱ it’s 2.5%. Some investors have looked abroad, especially toward ￰31￱ China’s capital controls block that ￰32￱ can only convert $50,000 per year into foreign ￰33￱ funds that allow access to global stocks are ￰34￱ if you do manage to invest abroad, get ready to hand over 20% of your earnings in ￰35￱ tax, paired with strict limits, makes overseas bets painful.

So, here’s where things ￰36￱ are boxed ￰37￱ the safe options are giving garbage ￰38￱ exciting ones are locked behind red ￰39￱ leaves stocks—local ones—as the only thing still ￰40￱ say most investors will probably keep piling into China’s market because there’s nowhere else to ￰41￱ you're reading this, you’re already ￰42￱ there with our newsletter .