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China needs a bull market to build strength: state media

Published 07/06/2020, 01:45 AM
Updated 07/06/2020, 01:50 AM
© Reuters. People walk past a statue of bull in front of an investment company at a financial district in Beijing

SHANGHAI (Reuters) - In a world reshaped by coronavirus, China needs further share market gains to fund a rapidly developing digital economy and strengthen its hand in intensifying power rivalries, state media said on Monday.

China's economy is recovering, while its capital markets are undergoing reform and attracting money from home and abroad, setting the scene for a healthy bull market, the official China Securities Journal said in an editorial on Monday.

The commentary from the newspaper, which is affiliated to the state-run Xinhua News Agency, points to government support for a further stock market run-up following a recent strong rebound. China's blue-chip index (CSI300) jumped over 4% on Monday morning to a fresh five-year high.

A vibrant capital market can help the Chinese economy "breed new opportunities in crisis, and break new ground in a changing world", the editorial said.

China has been stepping up capital market reforms amid tech-related tensions with the United States, while relations have worsened due to the coronavirus, which U.S. President Donald Trump blamed China for mishandling.

With the global supply chain being reshaped and power rivalries intensifying, China will be aided by a mature financial market, the editorial said.

The country introduced a U.S.-style, registration-based system for new listings on its Nasdaq-style STAR Market launched a year ago, and is replicating the reform on Shenzhen's start-up board ChiNext.

© Reuters. People walk past a statue of bull in front of an investment company at a financial district in Beijing

The new mechanism and other reform measures have laid the foundation for a "healthy bull" market, which is also being fueled by evidence of the country's strong economic recovery, the editorial said.

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