by Zhang Shidong at scmp.com
China’s state-media outlets have ramped up efforts to talk up onshore stocks at a time when foreign investors are fleeing the market amid fears of a weaker-than-expected recovery and uncertain China-US ties.
The state-run Economic Daily ran an article on Monday saying that stocks would be underpinned by continuing improvement in the economy and liquidity conditions. The Economic Information Daily, a newspaper run by the Xinhua News Agency, said that the onshore market has displayed characteristics of reaching the bottom. The Shanghai Securities News, operated by Xinhua, called for top mutual-fund firms to take responsibility for better educating investors and urging them to buy ahead of the market.
The drumbeat comes as worries over China’s growth outlook cast a pall on yuan-linked assets from stocks to the local currency and after overseas investors pulled out of onshore shares for a second month in May. The CSI 300 Index has given up all of the year’s gains, and the Chinese currency has weakened to its lowest level against the US dollar in six months after April economic data fell short of estimates across the board.
“Investors need to learn how to hold onto faith in a volatile market and firmly believe that China’s economy will trend up in the long run, as the pace of deepened reforms of the capital market will not be stopped,” the Economic Daily said in its article. “Don’t get disrupted by the short-term swings.”
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