April

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<p class="has-drop-cap">Authorities in China have <a href="https://www.reuters.com/world/china/china-plans-cut-stamp-duty-stock-trading-by-up-50-revive-sentiment-sources-2023-08-25/#:~:text=HONG%20KONG%2FBEIJING%2C%20Aug%2025,the%20country's%20struggling%20stock%20market" target="_blank" aria-label="proposed slashing stamp duty on stock trading (opens in a new tab)" rel="noreferrer noopener nofollow" class="deco-link">proposed slashing stamp duty on stock trading</a> from 20% to 50% in what would be the first reduction of this extent since 2008. The proposal comes after the Chinese blue-chip stock market index crashed to its lowest level since November 2022.</p> 
<h3 id="authorities-propose-stamp-duty-cuts-of-up-to-50">Authorities Propose Stamp Duty Cuts of Up To 50%</h3> 
<p>The Chinese government is set to reduce the stamp duty on stocks by up to 50% as the country’s stock market continues to decline amid the <a href="https://tokenist.com/chinas-biggest-property-developer-expects-to-post-7-6b-loss-for-h1-2023/" rel="dofollow" class="deco-link">worsening debt crisis</a> in the real estate market.&nbsp;</p> 
<p>China’s regulators, including the Ministry of Finance, put forward a draft proposal earlier this month to cut the stamp duty on stock trading. The reduction of the current 0.1% stamp duty suggested a cut of 20% or 50%, which, if materialized, would mark the first such move since 2008.&nbsp;</p> 
<p>According to Reuters, it is more likely that the extent of the cut will be set at 50%. People familiar with the matter said the decision could be announced on Friday.</p> 
<p>The proposal comes after CSI300, China’s blue-chip index tracking the top 300 stocks on Shenzen and Shanghai exchanges, <a href="https://www.marketpulse.com/podcasts/podcast-china-stock-market-hit-9-month-low-further-downside-risk-in-nasdaq-100-as-jackson-hole-looms/kwong" target="_blank" aria-label="tumbled to a 9-month low (opens in a new tab)" rel="noreferrer noopener nofollow" class="deco-link">tumbled to a 9-month low</a>. The index is down around 11% from its April highs, and more than 4.5% since the start of the year.&nbsp;</p> 
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<h3 id="stamp-duty-cuts-are-just-a-short-term-solution-fund-manager-says">Stamp Duty Cuts Are Just a Short-Term Solution, Fund Manager Says</h3> 
<p>While the proposed stamp duty cuts could provide relief to <a href="https://tokenist.com/foreign-investors-sold-9-8b-of-chinese-stocks-this-month/" rel="dofollow" class="deco-link">embattled Chinese stocks</a> in the short run, analysts do not see it as a long-term solution.&nbsp;</p> 
<blockquote class="wp-block-quote"> 
 <p>“Such a policy will likely give a short-term boost to the market, but won’t have much effect over the long run. The rebound could last for just two to three days, or even shorter.”</p> <cite>– said Xie Chen, fund manager at Shanghai Jianwen Investment Management.</cite>
</blockquote> 
<p>A shift in the market’s long-term trajectory would be prompted by expectations of positive economic developments, rather than stamp duty reductions, Chen added.&nbsp;</p> 
<p>China’s stock market woes were triggered by a slowdown in the nation’s economic growth and a growing debt crisis in the property market. Last week, China’s largest real estate developer <a href="https://www.bbc.com/news/business-66540785" target="_blank" aria-label="Evergrande filed for bankruptcy protection (opens in a new tab)" rel="noreferrer noopener nofollow" class="deco-link">Evergrande filed for bankruptcy protection</a> after seeing its debts accumulate to more than $300 billion.&nbsp;</p> 
<p>In the meantime, the world’s second-largest economy has also been <a href="https://tokenist.com/chinas-3t-shadow-banking-exacerbates-contagion-risk/" rel="dofollow" class="deco-link">grappling with growing worries</a> around potential repercussions stemming from payment defaults on shadow banking-associated trust products. The concerns primarily center on the significant interconnection between China’s massive $3 trillion shadow banking sector and its exposure to both property developers and the broader economic landscape.</p> 
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<p><em><strong>Do you think the Chinese stock market will continue to deteriorate throughout the remainder of 2023? Let us know in the comments below.&nbsp;</strong></em></p> 
<p>The post <a rel="nofollow" href="https://tokenist.com/china-to-cut-stocks-stamp-duty-for-first-time-since-2008-as-market-hits-9-month-low/">China to Cut Stocks’ Stamp Duty for First Time Since 2008 as Market Hits 9-Month Low</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

China to Cut Stocks’ Stamp Duty for First Time Since 2008 as Market Hits 9-Month Low

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