Mainland China stock market value hits unprecedented RMB 100 trillion
- Mainland China's stock market value surpasses RMB 100 trillion for the first time, highlighting significant market growth.
- Growth stocks lead the rally in the Mainland market, while traditional sectors struggle in Hong Kong.
- Investor sentiment reflects a shift from bonds to stocks as consumption recovers, indicating a changing economic landscape.
On August 18, 2025, the Mainland China's stock market reached a significant milestone as its total value exceeded RMB 100 trillion for the first time. This surge was marked by a strong performance in Shenzhen and other Mainland-listed growth stocks, which outperformed their counterparts in South Korea, Singapore, and Thailand, while Indonesia was closed for Independence Day. The trading volume was notably high, exceeding 190% of its one-year average. The day witnessed a broad rally, especially in growth stocks and small caps, with the STAR Board seeing an impressive gain of 2.14%. In Hong Kong, while growth stocks such as Alibaba, JD.com, and Trip.com experienced gains, traditional value stocks faced challenges due to declines in sectors such as banking, oil, metals & mining, and real estate investment trusts (REITs). This mixed performance occurred amid concerns about a "collapse" in China's bond market, which some analysts have suggested was exaggerated. The local sentiment seems to indicate a shift in investment focus from bonds to stocks. The bond market experienced a significant rebalancing as investors moved their savings towards equities, driven by an overall recovery in consumption and associated profits. The yield on the 10-year Treasury bond has also increased, reflecting shifting investor preferences. There is an anticipation of potential further shifts as consumption patterns evolve, taking into account recent reports from The Economic Observer indicating a structural revaluation process in the Mainland market. Additionally, provincial plans such as the "Three-Year Action Plan to Accelerate the Development of the First Store Economy (2025-2027)" illustrate government initiatives aimed at driving economic growth through retail expansion. Unitree, a notable robotics company, showcased its innovations by winning eleven medals at the World Humanoid Robot Games, highlighting the technological advancements stemming from China's growing markets. Meanwhile, a recent cancellation of U.S. trade negotiations with India adds geopolitical uncertainty to market dynamics. As of now, despite the significant rally, there are ongoing outflows in U.S.-listed China equity ETFs, revealing a complex sentiment among investors towards Chinese markets.