After surging 65% from its coronavirus low in March 2020 to its high in February this year, the Chinese share market saw an 18% decline into July. This reflected concerns about policy tightening, the economic outlook and a regulatory crackdown on a range of industries, notably tech stocks and steel production, with the latter contributing to a plunge in the iron ore price. So, what’s going on? How serious is the regulatory crackdown? What does it mean for China’s economic outlook and shares?

Regulatory crackdown

China’s regulatory crackdown has impacted multiple industries including internet stocks (like Alibaba & the Ant Group, Tencent and Didi with various anti-monopoly, financial regulation and cyber security investigations or scrutiny), private tutoring companies, property and online insurance. It has also recently restricted steel exports and announced a plan for “common prosperity.” The latter is focussed on growing the middle class, redistributing income, maintaining a large role for public ownership, and guiding public opinion on common prosperity.

Read Dr Shane Oliver’s article here