Why is China’s $11 trillion stock market a global headache? Despite a 28% year-to-date rebound, Chinese equities are reeling from decades of meager returns, eroding household trust and pushing savings rates to a staggering 35% of disposable income. The market’s design—built to channel funds to state priorities instead of rewarding investors—means families stay in "save, not spend" mode, undermining President Xi’s hopes for a consumer-led recovery.
Why does this matter for the US? Beijing’s reliance on stock sales to fund strategic tech—while consumers remain wary—leaves China less able to absorb tariff shocks or stimulate growth via spending. That feeds right back into the global supply chain (and America’s own inflation story), with both Xi and Trump feeling the squeeze as policy ambitions run headlong into household caution. Unless household investing confidence turns a corner, China’s recovery—and global demand—may fall short of policymakers’ lofty targets.
