China’s Stock Market Plunges After Chinese Leader’s Rare Public Appearance

A pedestrian walks past the Shanghai Stock Exchange in Shanghai, China, on Nov. 4, 2020.Hector Retamal/AFP via Getty Images

News Analysis

China’s stock market saw a sharp decline on Feb. 2, a day after Chinese leader Xi Jinping made a rare public appearance. Meanwhile, many Chinese shareholders took to the official Weibo account of the U.S. Embassy in China to air their grievances about the stock market.

Xi visited Tianjin on the afternoon of Feb. 1 for an “inspection,” according to Chinese media reports. The visit is notable because Chinese leaders rarely make public appearances on the streets of China. Video footage circulating on social media shows Xi saying that he ate buns in Tianjin in 1966 during the Cultural Revolution. Some China observers say that Xi’s visit may have been intended to clear up recent rumors that he has lost weight and is suffering from pancreatic cancer.

The Chinese stock market suddenly plummeted a day after Xi’s visit. China’s major stock indexes reportedly fell across the board, with the largest SSE Composite Index dropping by more than 3 percent during the trading session, falling below the 2,700-point mark and hitting a record low since March 2020; the SZSE Component Index fell by 4.85 percent at one point. That day, 5,223 stocks in the China A-share market fell, of which over a thousand stocks fell by more than 9 percent.

Li Yuanhua, a former professor at China’s Capital Normal University, said in a Feb. 4 interview with the Chinese edition of The Epoch Times that Xi’s public appearances have caused the Chinese people to be concerned that he may accelerate the Chinese Communist Party’s (CCP) current regressive policies, potentially hastening the economy’s collapse.

Lu Yuanxing—a U.S.-based China political and economic analyst and a former executive at a Chinese company—told the publication that the recent stock market incident shows that the people have completely lost confidence in the country’s economic prospects.

“People can see through the fact that Xi Jinping is leading China on a downward spiral,” Mr. Lu said.

“When he was rumored to be suffering from cancer, the stock market actually rebounded a little bit. But once he showed up to dispel the rumors, the general feeling was that if he were okay, he would continue to make things worse for China’s political and economic environment.

“It’s widely believed that Xi Jinping is largely to blame for China’s current state of affairs and, therefore, his every move directly contributes to the trend in China’s stock market,” he added.

Mr. Lu also believes China’s stock market will continue to trend downward in the long term. He explained that in the past, the stock market trends mainly reflected the CCP’s economic policies. But now, the CCP has lost its grip on the economy, he said, adding that various stimulus measures targeting interest rates and the property market have failed to produce any sustainable results. Consequently, the impact of these policies on the stock market has become minimal, he added.

Chinese State Media Expresses Optimism

Despite the stock market’s heavy losses, the People’s Daily, the CCP’s official mouthpiece, published an article on Feb. 2, claiming that “the entire country is full of optimism.” The article cited Renate Koppe, international secretary of the Central Committee of the German Communist Party, who allegedly said that the CCP has continued to improve the people’s well-being and quality of life through its process of modernization and that the people’s sense of gain, happiness, and security have all improved significantly.

The People’s Daily also launched a discussion thread on the heavily censored Chinese social media Weibo, focusing on China’s optimistic future, but it was met with mockery from Chinese netizens. Many included charts of China’s stock market in their comments.

State-run media Xinhua News Agency claimed in a Feb. 2 article that the number of Chinese cities with a total GDP exceeding 1 trillion yuan (about $140 billion) has increased from 24 to 26.

Chen Pokong, a China current affairs commentator living in the United States, doubted the Xinhua article and pointed out that it is merely the CCP’s propaganda. The messages from the CCP’s leaders and the state media are entirely out of touch and disconnected from the Chinese people, which is essentially “rubbing salt in the people’s wounds,” he said on his YouTube program.

Shareholders Express Anger

Many Chinese shareholders expressed their frustrations about the stock market on the official Weibo account of the U.S. Embassy in China since foreign embassies’ accounts are less likely to be censored. Chinese authorities closely monitor the internet.

On Feb. 2, although the U.S. Embassy’s Weibo account posted a statement on the third anniversary of the military coup in Burma, also known as Myanmar, the comments section was filled with messages about China’s stock market crash.

One netizen commented, referring to the less-censored embassy account: “Free speech is here. Thanks to the United States.”

The same thing happened on Feb. 3 when the U.S. Embassy’s Weibo account posted about giraffe conservation in Africa. However, the comments had nothing to do with giraffes but were mainly netizens sharing their concerns about China’s stock market.

It appeared as though the U.S. Embassy’s account became the only corner on China’s censored internet where people could express some form of criticism of the CCP’s policies, according to Mr. Lu.

“This shows that the CCP’s anti-American propaganda has been a complete failure,” he said.

Despite the CCP’s strict control of information, the Chinese people are learning about the outside world through other means, Mr. Lu noted, adding that while Beijing bragged about China’s supposedly “booming economy,” the people no longer believe in the CCP’s official narrative and, thus, its propaganda has become ineffective.

Xin Ning contributed to this report.