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Chinese Stocks Plunge After Worst Week in Years, Unveiling Financial Turmoil

via Bloomberg Television
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Chinese stocks experienced a significant downturn, with the Shanghai Composite index falling by 6.2% and the Shenzhen Component index dropping by 8.1%.

China’s blue-chip CSI 300 index also fell by 4.6%. The country’s economy faces challenges such as a record downturn in the real estate market, high youth unemployment, deflation, and a falling birthrate.

The International Monetary Fund expects China’s GDP growth to slow to 4.6% in 2024 and further decline to about 3.5% in 2028.

The liquidation of Evergrande, a major property developer, raised concerns about the future of similar companies.

Diana Choyleva, chief economist for Enodo Economics, said, “These policies indicate that healthier developers can therefore expect increased funding this year, while those struggling to clear their debts will likely go the way of Evergrande.”

Despite attempts to boost confidence through policy measures, investors remain worried about China’s economic trajectory.

Bank of America analysts wrote in a statement, “There seems to be no policy guidance or initiatives so far on how to ‘promote growth.’”

In contrast, India’s stock market has seen significant growth, reflecting the potential of its fast-growing economy.

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