China’s market is up 0,6% this week, outpacing the country’s economic growth rate of just 0.5% a day earlier, the Chinese Stock Exchange (CSE) said Wednesday.
That’s a sharp improvement from last week’s close of 0.2%.
That’s the biggest one-day gain for the Shanghai Composite since the beginning of the year, the Shanghai Banking Corporation said in a statement.
It was the first time the CSE’s market index closed higher than 1,000 since November.
The market, which has long been a hotbed of speculation about China’s next leader, has been a favorite target of traders as it is one of the world’s biggest economies.
China’s central bank has said it will not use its policy tools to control the market.
“The market is growing stronger as people’s expectations about the next leadership have been driven by the upcoming elections,” said Jie Wei, an economist at Capital Economics.
The economy, China’s biggest, has shrunk 1.4% this year.
The CSE said that while there has been some uncertainty about who would win the election, it was still a safe bet that Xi Jinping would be the next leader of China.
The Sino-U.S. alliance has been weakened by Xi’s recent moves to tighten his grip on power.
That has helped the Chinese economy slip into a slump.
China is facing its largest sovereign bond default in decades, raising questions about whether Xi will be able to continue to push through reforms that are designed to boost growth.
In a statement, the CSC said it expected “unusual conditions” in China and warned of “dangerous developments.”
It said that “China will be a strong market for U.S.-Chinese trade and investment for a long time to come.”