China’s Stock Market Struggles to Boost Consumer Spending Despite Reforms – Insights and Data

China’s Stock Market Fails to Drive Consumer Spending Despite Reforms – News and Statistics

Aug 17, 2025

China’s stock market, valued at $11 trillion, has failed to incentivize consumer spending due to poor equity returns over the past decade, according to a Bloomberg report. A $10,000 investment in the S&P 500 Index a decade ago would now have more than tripled, while the same amount in China’s CSI 300 would have gained only around $3,000. Data from the IndexBox platform shows that China’s household savings rate remains high at 35% of disposable income, reflecting persistent investor caution.

Structural issues in China’s stock exchanges, originally designed to channel household savings into state-owned enterprises, have contributed to weak investor returns. Despite recent regulatory improvements, including stricter IPO screening and higher dividend payouts, the CSI 300 has risen less than 7% this year, lagging behind global benchmarks. Shanghai and Shenzhen-listed companies distributed 2.4 trillion yuan ($334 billion) in cash dividends for 2024, a 9% increase from the previous year, yet share buybacks by CSI 300 firms accounted for just 0.2% of market value, far below the nearly 2% seen in the S&P 500.

Efforts to attract tech listings, such as resuming unprofitable company IPOs on the STAR and ChiNext boards, risk prioritizing financing needs over investor protection. Analysts warn that without stronger corporate governance reforms, investor confidence will remain subdued. “The entire regulatory environment is still not up to the task of delivering the best out of those companies,” said Dong Chen, chief Asia strategist at Pictet Wealth Management.

Source: IndexBox Market Intelligence Platform

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