MARKET NEWS
China’s $11 Trillion Stock Market Is a Headache for Both Xi and Trump - BLOOMBERG
(Bloomberg) — At the heart of why consumers in China save so much and spend so little, and why Xi Jinping and Donald Trump will struggle to change that behavior even if they want to, lies the country’s stock market.
Even after a recent rally, Chinese indexes have only just returned to levels seen in the aftermath of a dramatic bubble burst a decade ago. Instead of incentivizing consumers to spend, poor equity returns have nudged them toward saving. A $10,000 investment in the S&P 500 Index a decade ago would now have more than tripled in value, while the same amount in China’s CSI 300 benchmark would’ve added just around $3,000.
Part of the reason, long-term China watchers say, is structural. Created 35 years ago as a way for state-owned enterprises to channel household savings into building roads, ports and factories, exchanges have lacked a strong focus on delivering returns to investors. That skew has spawned a host of problems from an oversupply of shares to questionable post-listing practices, which continue to weigh on the $11 trillion market.
The country’s leaders are under pressure to fix this. President Xi is counting on domestic spending to reach the 5% economic growth goal, especially as a tariff war with the US heats up over the massive trade imbalance. At the same time, Beijing has reasons to keep prioritizing the market’s role as a source of capital: the country needs vast funding to nurture companies that underpin its tech ambitions — even if their profitability remains questionable.
“China’s capital market has long been a paradise for financiers and a hell for investors, although the new securities chief has made some improvements,” Liu Jipeng, a securities veteran who teaches at China University of Political Science and Law, said in an interview. “Regulators and exchanges are always consciously or unconsciously tilting toward the financing side of the business.”
The limits of China’s stock rally have again been evident this year. The CSI 300 has risen less than 7% despite a burst of optimism over AI, trailing benchmarks in the US and Europe. The underperformance — along with factors including an uncertain economic outlook — helps explain China’s extraordinarily high savings rate, which stands at 35% of disposable income.
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£15,000 in savings? Here’s a smart plan that could turn that into £15,000 of passive income
Dr. James Fox Sun 17 August 2025 at 6:17 am BSTIn this article:
PINSA lump sum of £15,000 might not seem life-changing. But with a smart investing strategy and enough time, it could form the foundation of a sizeable passive income portfolio.
Historically, the stock market has delivered average annual returns of around 8%–10%. At a 10% growth rate, a £15,000 investment left untouched could compound into roughly £300,000 in 32 years. From there, a 5% yield could generate £15,000 in annual passive income — essentially turning savings into a salary.
That’s one way to do it. But there’s a way to get there faster.
By adding just £250 per month and reinvesting all returns, an investor could reach nearly £300,000 in just 20 years, assuming that same 10% growth. That’s less than half the time compared to a lump sum alone.
Here’s how the numbers stack up:
After 10 years: approximately £91,800
After 15 years: approximately £170,400
After 20 years: approximately £299,800
Compounding is the secret sauce
This impressive end result comes from combining regular contributions with compounding returns. Each monthly deposit has the chance to grow and multiply over time, accelerating wealth creation. Just look at how the accrued interest grows over time.
Source: thecalculatorsite.com To protect gains and income from tax, investments can be held within a Stocks and Shares ISA, where both capital growth and dividends are shielded from HMRC.
So, what’s key to success? Patience, consistency, and a long-term mindset. Dividend-paying shares, low-cost index funds, and global equity trusts can all play a role in building a resilient, income-generating portfolio.
It’s a simple idea — but one that could change the trajectory of a financial future. However, investors should be wary that they can lose money, especially over the short term.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Investing to beat the market
Novice investors may wish to start their investing journeys by buying index tracking funds. This is a super diversified way to get going.
However, more ambitious investors may wish to pick individual stocks. One stock I like is Pinterest (NYSE:PINS). It looks attractively valued for a platform with strong earnings momentum and growing AI integration. The company sits on a net cash position of $2.5bn and trades at just 19.9 times forecasted earnings for 2025 — falling to 10.6 by 2028 based on current consensus.
Analysts expect earnings growth of nearly 40% in 2025, driven by improved ad monetisation, deeper engagement, and AI-powered content curation. Pinterest’s ability to link visual discovery with shopping makes it uniquely positioned in the social commerce space, in my view.
However, the key risk is competitive pressure. Larger platforms like Meta and TikTok are also investing heavily in AI and commerce, and Pinterest’s smaller scale could limit its reach and pricing power in digital ads.
That said, with strong financials, consistent user growth, and an improving margin profile, I believe the shares are worth considering at current levels.
James Fox has positions in Pinterest. The Motley Fool UK has recommended Meta Platforms and Pinterest. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
