Chinese officials are introducing the biggest reform in the local stock market. (Photo : Reuters)
China's stock market value rose to $10 trillion at the end of trading on Friday for the first time. The value of China's primary listing companies also surged $6.7 trillion in one year, which is greater than the $5 trillion size of Japan's stock market.
The United States has the world's largest stock market, valued at nearly $25 trillion.
China's equities have skyrocketed, causing the stock exchange to experience record-breaking growth in 12 months. Investors are borrowing funds to bet on continued growth.
However, signs of inflated stock prices exist. Although valuations have hit a five-year high, China's economy is experiencing its weakest growth since 1990.
The Shanghai Composite Index boosted China's stock market with an uptick of 2.9 percent last week. It hit its highest level since January 2008.
Meanwhile, the Shanghai Index surged 60 percent during 2015, which is the highest increase among worldwide benchmark indexes, according to Bloomberg. Meanwhile, The Shenzhen Composite Index has already skyrocketed 122 percent this year.
When foreign investors purchase Shanghai Index shares through a Hong Kong exchange link, they are limited by a cap. A similar access scheme will probably be implemented for the Shenzhen Index this year, according to Sydney Morning Herald.
Not all sectors of China's economy are increasing. For instance, retail sales, manufacturing, and exports are growing slowly or declining.
Still, investments in China's stock market remain strong. People opened 4.4 million new trading accounts in the last week of May, while margin debt on the Shanghai stock exchange rose to an all-time high $232 billion on June 11.
