What happened with Chinese stock market in 2018?

Chinese Stock Market News

Chinese Stock Market News

Over the last few weeks, major indexes of US stock markets have dropped palpably. However, things could be much worse. One only needs to take a look at China, where the drop has been happening much longer and is indeed much steeper. Yes, Chinese stock markets in 2018 haven’t been performing well, to put it mildly, and there is much to worry about with the advent of the new year. If you’re looking to invest there, this short recap will tell you what kind of situation you can expect. There are plenty of factors to consider, so just keep reading.

The trade war with the US

OK, first things first. Probably the most famous event concerning China’s economy in the last year was the trade war with the United States. A truce was agreed on with President Trump on December 1, but that didn’t have a lot of positive effects on the market, which speaks volumes about the situation China is facing. There is potential for a bubble of real estate prices there too, not unlike the one seen in the US back in 2007. By the way, the US could also be facing a recession in 2020. On the plus side, though, the government is expected to stimulate more in 2019, and the interest rates are not expected to rise as much as in the US. The reason for that, however, is that the economy is slowing down and there are even concerns about the strength of the yuan in general.

Chinese stock markets in 2018 dropped hard

The main problem and probably the best depiction of Chinese stock markets in 2018 is the status of some of their main indexes. Both Hang Seng and Shanghai Composite are on their way down, with the latter dropping 25% in 2018 alone, which is its worst performance in a decade. The end of this year is showing no signs of this trend abating – in the first three weeks of December, Shanghai Composite went down 5% and the Dow about twice as much. But the difference between the two is almost 40% in favour of the Dow, with a reason for that also being the fact that big companies in the country use their stocks as a form of collateral in some cases when they want to loan money.  


Chinese economy has suffered a hard year, no doubt about that. The stock markets took the hardest hit, with the main indexes falling constantly and significantly throughout the year. Not even the truce achieved with the US about the trade war between the two countries could improve the situation. The slow economy will receive some stimulation from the government in the following year, but it remains to be seen how big of an impact these moves will have. Indexes definitely seem to be on a slump, and the potential real estate bubble shouldn’t be overlooked either if you’re an investor, just like the yuan’s overall strength. Keep following our website for more updates in the new year.

Author's overall rating:
Author: Ben Prescott

BinaryOptionsTrading-Review.com has taken reasonable measures to ensure the accuracy of the information in the website, however, does not guarantee it. The data exhibited in this website is not necessarily always real-time or completely accurate; this includes market analysis, forecasts, signals, assets’ price quotes and charts. Readers should not treat any opinion expressed by the authors of BinaryOptionsTrading-Review.com as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of their current opinion. The risks involved in trading binary options are high and may not be suitable for all traders. BinaryOptionsTrading-Review.com doesn't retain responsibility for any losses readers might face as a result of using the information presented in this website. This website is owned by Next Media Corp.
In accordance with FTC guidelines, BinaryOptionsTrading-Review.com has financial relationships with some of the products and services mentioned on this website. BinaryOptionsTrading-Review.com may be compensated if consumers choose to click links in our content and ultimately sign up for mentioned products.
Binary options are not promoted or sold to retail EEA traders. If you are not a professional client, please leave this page.