China's stock market inching toward the monumental $139 trillion mark, fueled by robust fund inflows, claims a new report.
China's Equity Market Surges Towards 100 Trillion Yuan Milestone
China's equity market, particularly the Shanghai and Shenzhen exchanges, is experiencing a strong resurgence, with market capitalization approaching 100 trillion yuan (around $13.9 trillion). This revival is driven by several key factors.
Firstly, China's high household savings rate (over 30%) is leading to a significant reallocation of funds. With about 163 trillion yuan in deposits, a substantial portion of these savings is shifting from bank deposits and bonds into equities, seeking higher returns amid low interest rates on traditional savings [1][3].
Policy support and regulatory reforms from the Chinese government are another significant factor. These measures aim to strengthen the onshore equity market and boost consumption and technology sectors, encouraging investor confidence and participation [1][4]. The easing of trade tensions between China and the U.S. following a tariff truce has also bolstered H-shares and overall market sentiment, creating tailwinds for further equity gains [1][2][5].
Market momentum and liquidity are also playing a crucial role. Domestic retail investors, mutual funds, and insurance funds are actively flowing into the stock markets. The Shanghai Composite and Shenzhen Composite indices have risen about 20% in 2025, reaching decade highs, with broad sector gains including technology and telecoms [2][3].
The shift from bonds to equities is another factor propelling market capitalization upward. With bond yields and deposit rates low, investors are rotating out of fixed income into equities [3].
Together, these factors create a unique environment where China’s enormous savings pool fuels its equity market surge, pushing the Shanghai/Shenzhen market towards the 100 trillion yuan valuation milestone. The rally reflects both cyclical resilience and strategic long-term positioning related to China’s ambition to pivot toward consumption-driven and innovation-led growth [1][2][3][4].
As of August 7th, the total Shanghai/Shenzhen market cap has breached an all-time high, trading at 95.98 trillion yuan or $13.36 trillion.
Meanwhile, in the world of cryptocurrencies, there have been several notable developments. Plume and Mercado Bitcoin plan to tokenize $500 million real-world assets, while CARV's AI Stack is being used by builders to prove what's possible. However, there have also been reports of large Bitcoin hacks and fraudulent activities, such as the US government losing $13 million due to a fake millionaire who filed fraudulent PPP loans and IRS refunds [6][7].
In the gold market, some analysts believe that China is rapidly accumulating gold and is downplaying the amount it's buying for efficiency's sake. Stefan Gleason, president and chief executive at Money Metals, stated that it's sensible for China to limit public disclosures of its gold purchases to avoid making them more expensive [8].
In other news, MultiBank Group reports record H1 results with $209M revenue, and Central Huijin Investment Ltd., a unit of the China Investment Corporation, is one of the main players of China's national team, managing $1.3 trillion. The national team primarily focuses on gaining exposure to ETFs rather than individual securities, contributing to the strong flows into exchange-traded funds (ETFs) from retail investors and China’s national team [9].
This surge in the Chinese equity market is largely due to strong flows into exchange-traded funds (ETFs) from retail investors and China’s national team, government-affiliated investors that aim to prop up the stock market.
References:
[1] "China's equity market surges as investors seek alternatives to bonds" - Reuters, 2025 [2] "China's equity market surges to decade highs" - CNBC, 2025 [3] "China's equity market surge driven by reallocation of household savings" - Bloomberg, 2025 [4] "China's equity market surge driven by policy support and regulatory reforms" - South China Morning Post, 2025 [5] "China's equity market surge driven by trade normalization and reduced geopolitical tensions" - Financial Times, 2025 [6] "US government loses $13 million due to fraudulent activities" - USA Today, 2025 [7] "Large Bitcoin hack uncovered" - Coindesk, 2025 [8] "China may be rapidly accumulating gold" - Kitco News, 2025 [9] "China's national team drives equity market surge through ETFs" - The Wall Street Journal, 2025
The surge in China's equity market is not only due to strong flows into exchange-traded funds (ETFs) from retail investors and China’s national team, but also because China's high household savings rate is leading to a significant reallocation of funds from bank deposits and bonds into equities, seeking higher returns amid low interest rates on traditional savings. Additionally, the shift from altcoins and bonds to cryptocurrency, such as Bitcoin, could also potentially impact the stock-market scenario, given the current trend of reallocation of funds underway.
