It has fallen again. Why can’t the Chinese stock market continue to rise?

In the long run, the performance of China's stock market is indeed not as good as some major international stock markets, and there have been many cases of hovering around 3,000 points. There are many reasons behind this:

1. Institutional and policy factors

• Imperfect regulatory system: Some experts point out that unreasonable regulatory systems and policies are key factors leading to the long-term downturn in the stock market. For example, if the issue price of new shares is too high, the decline in stock prices after listing will have a negative impact on the stock index.

• Market expansion and imbalance between supply and demand of funds: The number of listed companies in the A-share market continues to increase, but the delisting mechanism is not perfect, resulting in oversupply in the market and difficulty for funds to drive a substantial increase in the index.

2. Market ecology and investor structure

• Scarcity of high-quality assets: The proportion of high-quality assets in the A-share market that are truly worthy of long-term investment is not high. After some companies go public, major shareholders are eager to cash out, resulting in a strong atmosphere of speculation in the market.

• Lack of investor sentiment and confidence: Investors’ confidence in the stock market has been affected by its long-term sluggish performance. Market sentiment is relatively cautious and there is a lack of incremental funds entering the market.

3. Macroeconomics and fundamentals

• Economic growth and stock market disconnect: Despite China’s long-term economic growth, stock market performance has not fully matched economic growth. This is partly due to structural problems in economic growth and the failure of corporate profits to effectively translate into shareholder value.

• Macroeconomic uncertainty: Uncertainty in the external environment, such as international trade frictions and global economic fluctuations, also has a negative impact on investor confidence and market performance.

4. Market technology and funding factors

• Chip pressure and capital bottleneck: There are a large number of locked-in chips in the 3,000-4,000 point range, and the market needs a larger trading volume to effectively break through, but the A-share market is currently in a state of stock capital game.

• Foreign capital flows and market sentiment: The inflow and outflow of foreign capital have a significant impact on market sentiment, and its short-term cautious attitude may increase market adjustment pressure.

5. Market culture and speculative behavior

• Market culture issues: Some market participants view the stock market as a short-term arbitrage tool and ignore the long-term investment value of the market. This speculative culture is not conducive to the healthy development of the market.

6. Uncertainty in policies and market expectations

• Policy implementation and market reaction: Although favorable policies have been introduced many times at the policy level, it takes time for the policies to be implemented and market expectations to be adjusted. Investors have doubts about the sustainability and stability of the policies.