📍Beijing will soon have to rescue the $11,000 billion stock market.

📌Context: the economy is slowing down sharply, the real estate ( which once accounted for over 30% of household assets ) is collapsing, consumer confidence has fallen to its lowest level in over 20 years. If the stock market – where financial assets are valued – does not restore the hope of becoming "rich" again, then people will still... hold defensive cash → the economy falls into a liquidity trap and the "defensive mentality" persists.

🚨 Why can't the Chinese stock market "wake up" by itself?
- After the crash in 2015, the CSI 300 plummeted and then went sideways for nearly a decade → retail investors lost confidence.
- The structure of the capital market prioritizes raising capital for state-owned enterprises (SOEs) rather than generating profits for shareholders, leading to stocks not reflecting value – a lack of speculation motivation.
- Low-quality IPOs are rampant, companies hardly pay dividends → "Anyone who enters first becomes the one who pays for those who enter later."

🛠 Currently, Beijing is trying to rebuild trust with a series of unprecedented moves:
- Strongly restrict new IPOs, especially for "non-strategic" companies.
- Forcing an increase in dividends, turning shares into cash-generating assets → similar to the Japanese policy used to revive the Nikkei.
- Tighten the management of insider trading, wash trading → send the message: "this market will no longer be a casino."
- Adjust the role of securities - from "fundraising channel" to "repository of asset expectations."

If people see financial assets increase, they will spend. When they spend money, the economy comes back to life. Without expectations of assets, all stimulus packages are meaningless.