China’s middle class is riding a wave of optimism for now, but can it last?

As a raft of stimulus measures boost confidence, many remain cautious about the nation’s long-term economic prospects

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Hundreds of millions of Chinese rushed to buy stocks this week. Photo: Xinhua

Published: 10:00pm, 12 Oct 2024

After the mainland Chinese stock market fell to a five-year low in February, Gu Wenyi dumped all her shares, vowing “never again”.

The 41-year-old had lost around 80 per cent of the 2 million yuan (US$283,000) she invested over a decade.

This week she was among the hundreds of millions of Chinese rushing back to the market on a wave of optimism after the government announced new measures to revive the economy.

“I think the top leadership is serious this time,” said Gu, a homemaker in Shanghai whose husband is a company executive. “As a stock market veteran, I’m cautiously optimistic – I’m sure we’ll have a bull market but it’s uncertain how long it will last.”

Mainland Chinese bourses saw record highs in trading volume on Tuesday when they reopened following the week-long National Day holiday. It was prompted by a slew of economic stimulus measures that have supercharged the confidence of middle-class investors, at least in the short term. But many remain cautious about the country’s long-term economic prospects.

The mainland stock market has been one of the world’s worst performers since 2021, hit by a shaky post-pandemic economic recovery and as Beijing’s focus was on other issues like national security and technology amid tensions with Washington and its allies.