China's Two-Year Bull Market: Index Up 45%, Yet Investors Still Sigh
Two years ago this week, China’s stock market pulled off one of its most dramatic turnarounds in memory. On September 24, 2024, the Shanghai Composite Index — the headline gauge of mainland China’s equities — rocketed 4.15 percent in a single session after touching a low of 2,689 points, marking its largest one-day gain in four years. Fast forward to today, and the index trades above 3,888 points.
The numbers behind that rally are staggering. Over the past two years, the Shanghai Composite has climbed roughly 45 percent, and the total value of Chinese A-shares — the stocks listed on the mainland’s Shanghai and Shenzhen exchanges and traded in the local currency — has swelled by about 51 trillion yuan, an amount comparable to several trillion US dollars. On paper, this should rank among the great bull markets of recent memory.
Yet strike up a conversation with an everyday Chinese stock investor, and the mood is often far more muted. A common response to the question ‘did you make money over these two years?’ is a pause, a sigh, or a shrug. Financial commentators in China have a phrase for the phenomenon: wealth is being redistributed all over again, and not evenly.
The disconnect comes down to how China’s market is built. A-shares are famously dominated by retail investors — ordinary households who follow stocks with the passion people elsewhere reserve for football. In a market driven by fast-moving themes and sharp sector rotations, gains have tended to concentrate in a narrow band of large-cap leaders and fashionable industries, while countless smaller names have lagged behind or drifted lower. Investors who bought high during euphoric stretches and sold low during pullbacks frequently ended up underwater even as the headline index soared.
Appetite for fresh stories certainly has not faded. This week, a biomedical firm called Bairuiji made its debut on the Beijing Stock Exchange, opening 347 percent above its offering price and briefly surging more than 477 percent intraday. The frenzied reception shows speculative energy is alive and well — a double-edged sword for newcomers hoping quick gains will simply materialize.
For global observers, the two-year milestone offers a case study in the gap between index performance and investor experience. Market watchers in China often speak of the ‘making money effect’: in a retail-heavy market, household savings pour into stocks only when people see friends and neighbors actually profiting. An index up 45 percent means little to someone whose own portfolio trails it — and confidence, once dented, tends to rebuild slowly.
Seasoned analysts draw a familiar lesson: timing and selection matter more than direction. Much of the two-year gain arrived in concentrated bursts, rewarding those positioned early and punishing latecomers who chased momentum. The advice circulating in Chinese financial media this week leans toward patience — favoring companies with solid earnings over theme-of-the-month plays, and treating volatility as a feature of this market rather than a flaw.
Whether the next two years prove kinder to the average account holder will shape how this bull market is remembered. For now, the anniversary stands as both a celebration and a cautionary tale. A rising index added some 51 trillion yuan in value, but across China’s vast sea of retail investors, the tide lifted boats unevenly — and many are still waiting for their share of the wave.