The Chinese stock market was one of the biggest surprises of the year without a doubt. After the summer months, the Chinese stock market surged out of the blue and many analysts were caught off guard.

The Chinese economy, on the other hand, has been doing worse in recent months. You are probably wondering why the Chinese stock market rose in value while the economy is under-performing? The rise is mostly based on hope among investors.

As a consequence of disappointing macro figures the Chinese government had to step in and recently interest rates were lowered in China, which already brought back some hope. This is the biggest reason for the surge on the Chinese stock market.

What Will China Do Next Year?

Recently we saw another macro figure from China: the ‘HSBC purchasing managers index'. This index dropped back to the lowest point in 7 months to 49.5. Everything below 50 is bad news and it is clear that the purchasing managers index is in the rough.

In the coming months, the odds are high that the Chinese government will have to do more to help the Chinese economy back on its feet. From that perspective the Chinese stock market remains attractive to investors, despite the recent surge.