Full Breakdown
CF40 Report Suggests China’s Stock Market May Have Turned Around After Evergrande Slump
7/14/2026, 12:24:14 PM
Background & Context
The Evergrande debt crisis exposed deep vulnerabilities in China’s property sector, triggering a broad market sell-off that began in early 2021. The crisis prompted analysts to monitor how a prolonged property slump could affect the nation’s equity markets.
Data & Statistics
- China’s domestic A-share market, which tracks companies listed on the Shanghai and Shenzhen exchanges, fell 45.6 % from its February 2021 peak to September 2024.
- Inflation bottomed out in 2023 and has risen steadily since, while real interest rates—borrow-costs adjusted for inflation—have fallen markedly, reducing downward pressure on stock valuations.
- Credit growth has moderated but never entered a deep contraction, indicating continued financing availability.
- The CF40 researchers examined stock performance across 18 historic deep-property slumps worldwide, finding that post-slump recovery speed depends more on macro conditions than on the magnitude of home-price declines.
Official Statements & Responses
In a report published on Sunday, the China Finance 40 Forum (CF40) concluded that China may have moved past the worst of the property-sector downturn. The think-tank linked the recent upward trend in the A-share market to a “more favourable macro environment,” citing the inflation rebound, lower real rates, and sustained credit growth. The report also noted that a series of supportive government policies coincided with the period when inflation began to recover, helping the market regain roughly its 2021 level.
Verbatim Quotes
“These differences show little correlation to home price falls, and they mainly depend on post-slump macro conditions,” — Yu Fei, researcher, China Finance 40 Forum
Why It Matters
If the macro environment continues to improve, the recovery of China’s equity market could bolster investor confidence and provide a buffer against future shocks in the property sector, influencing both domestic capital allocation and international perceptions of Chinese market stability.
