Renowned economist Han Zhiguo: Long-term bull market! China's stock market opens up room for growth

Renowned economist Han Zhiguo recently gave an exclusive interview to Shenzhen Business Daily, stating: The A-share market has entered a long-term bull market. The current stock market rise is merely a recovery, and the long-term upward potential has already opened. China’s stock market fully meets the subjective and objective conditions for a super bull market; there is no need to fear or be anxious about rising stocks. The harm caused by long-term declines in the stock market to China’s economy has been fully demonstrated. Only a long-term bull market can create the synergy and momentum to promote technological innovation, industrial upgrading, and resource optimization, thereby fully leveraging the functions and roles of the capital market to help build a strong financial nation.

Han Zhiguo believes that a stock market rally cannot rely solely on lifting a few heavyweight stocks to form an “index-type bull market.” Inclusive wealth effects are the true source of attraction in the stock market. Without most stocks rising and most investors gaining property income from the market, an increase in the index is meaningless. China is at a critical stage of transitioning from a post-industrial society to a modern economy. Only a strong and developed stock market can lead China’s economy from a large economy to a powerful one. Institutional innovation in the stock market must be accelerated and deepened; all systems that do not meet the requirements of a modern market economy should be eliminated as soon as possible.

Han Zhiguo states that for any bull market to effectively attract social funds, there must be a pulse-like, grand inclusive rally during its development. Relying solely on heavyweight stocks to drive an “index-type bull market” is detrimental to solving deep-seated economic contradictions and benefits few. The most important thing is to have a comprehensive, profound, and essential understanding and grasp of the position, functions, and roles of the stock market in a modern market economy, rather than approaching market development with a speculative mindset and utilitarian perspective that concern the overall economic outlook and the vital interests of millions.

Han Zhiguo emphasizes that as the world’s two largest economies, China and the United States will face increasingly fierce competition in multiple fields. Economically, the main battleground of this competition is shifting more and more toward the capital markets, especially the stock markets. Both countries have over 5,000 listed companies, but the US stock market is dominated by tech companies, while China’s market is led by traditional enterprises. There is a clear objective gap of “quantity close but quality far” in their development. Recognizing this gap is the first step to narrowing it. The 18-year super bull market in the US has had a profound impact on its economy and technological progress. The current long-term bull market in China’s stock market will fundamentally change China’s economic development model and operational methods, helping technological innovation and progress reach new heights and new levels.

(Source: Shenzhen Business Daily)