Regulatory authorities in China are considering a series of new measures to cool down the Chinese stock market after its value rose by about $1.2 trillion since early August 2025, according to sources cited by Bloomberg.

Proposed Measures to Curb Speculation

The proposals presented to senior policymakers include tightening restrictions on short selling and monitoring excessive speculative activities. Authorities fear that any sharp corrections could lead to significant losses for individual investors, potentially affecting consumer confidence and threatening financial stability.

Performance of the Chinese Stock Market

The Shanghai Composite Index reached its highest level in a decade, and the CSI 300 Index surged more than 20% since April. According to stock exchange data, the number of new accounts opened by individual investors increased by 166% in August compared to the same period last year, indicating a large inflow of liquidity into the market.

Parallel Regulatory Steps

• Regulators have asked banks to investigate the use of credit funds for stock purchases.
• Guidelines were issued to brokerage firms to avoid aggressive promotion of new account openings.
• Supervision of content posted on social media platforms such as WeChat has been tightened to prevent excessive enthusiasm among novice investors.
• More than 400 mutual funds announced suspension or caps on subscriptions during August.

Economic Background

This move comes at a time when the Chinese economy faces ongoing challenges, notably the real estate sector crisis and economic contraction, alongside external pressures such as trade tensions with the United States. Officials aim to ensure more stable gains and avoid a repeat of the 2015 bubble scenario that led to a sharp price collapse.