Mainland A-shares hovered around 3,000 points, briefly exceeded 2,900 points at the end of 2023, and began to rebound slightly in 2024. So, why has China's stock market been hovering at a low level for a long time? When will China's stock market be able to start a long-term upward channel, especially in 2023, the stock markets of all countries in the world will generally move higher, including the stock markets of Europe, the United States and even India, which are in the upward channel, and they are rising rapidly.
Some economists believe that the stock market has a greater impact on the confidence of the entire economy and on the driving force of the entire economy, and hope that the government will introduce some policies to promote the positive development of the stock market, so that the stock market will turn from a long-term sideways trend into a sustained upward channel. Although the impact of mainland government policies on the stock market is greater than that of some other countries, mainland policies have not taken measures to suppress the stock market, and no government has directly intervened in the stock market to make the stock market rise. Globally, the trend of the stock market is determined by the interests of the market, not by the interests of the government.
The present and future of China's stock market should be analyzed and understood from the economic roots.
In the upward stage of enterprise development, the economy will go up, the company's stock will also go up, and the stock market will also show an overall upward trend.
China's stock market started in the 90s and reached a maximum of 6,000 points in 2008. It has risen 60 times in 18 years, and the growth of the stock market is self-evident, which corresponds to the early industrialization of the mainland. In the early stage of industrialization, the economy continued to expand, and the positive economic situation drove the index to rise.
Now that the stock market is in a position, why can't it rise now?
In the early to mid-term of industrialization, with the improvement of the level of industrialization, the expansion of scale, and the development of enterprises, the profits of traditional industries were very rich: from the 80s to about 2010, the business conditions of enterprises were improving, entrepreneurs had profits, workers' incomes increased, and the amount of social wealth continued to increase, and the industry and manufacturing industry showed an upward channel.
Now we can see that the situation has changed: the operation of traditional enterprises has been difficult, profits have been decreasing, the scale has been compressed, the income of workers has not increased, the amount of consumer wealth has reached a bottleneck, and the traditional industry and manufacturing industry are showing a downward trend. Taking Shenzhen as an example, at the end of the 20 th century, the wage level in Shenzhen was basically around 600 per month, but now it has risen to 5 or 6 thousand per month, and the basic wage has risen tenfold.
The production enterprises of traditional products have shifted from better profitability to less profitability, or even no profit, which is the inevitable result of the development of industrial institutions.
From the perspective of the stock market structure, the mainland's stock market is a stock market dominated by traditional enterprises. This is in line with the mainland's initial goal of providing a platform for financing traditional enterprises, including traditional industries such as coal mines, iron and steel, and textile mills.
Traditional industries are relatively stable and can be seen clearly, which has led to the fact that the mainland's stock market has not been a stock market that serves risk-based enterprises, high-tech enterprises, and high-quality development enterprises.