Hi @nithin
Why has the Chinese stock market given very slim returns in the last 20 years? but the economic growth has been phenomenal in China for the past 20 years.
Shanghai Composite Index levels were 1200 20 years before, and now its 3200 levels only.
Will India also face the same issue? Even though the country is growing, the stock market index won’t match the growth.
Here is the Shanghai Composite Index’s last 20-year chart.
Hi @ramesh1985
Would recommend you to check our Z-connect post on this topic.
If I were to give a very short summary in 3 lines:
In general, Ordinary Chinese people do not trust stocks and bonds.
They save a lot but put money in real estate.
Government intervention is absurd.
Lack of transparency from the government, companies, and geopolitical tussles with other major players like the US and Europe mean fewer institutional investors as they have many restrictions to invest.
In that sense, India has done a pretty decent job in opening up to investment in our markets.
What would happen in the future? We can only guess…but it would be a fair assumption to make that our govt structure, policies, etc, are fundamentally very different from the Chinese way of approaching markets (keeping things closed), and that eventually might lead to a change in outcomes in the long term.
