China Stock Market Sets New Record in August 2025

Monthly Turnover Reaches Highest Level Ever

This August, China’s stock market has seen a record monthly turnover. The average daily trading volume reached 2.2 trillion yuan (about $309 billion), beating the previous high of 2 trillion yuan set last October after the government introduced stimulus measures. The CSI 300 Index, a major onshore benchmark, jumped nearly 10% this month, making it one of the world’s best-performing stock markets. This rally comes during continued concerns over US tariffs and China’s property market problems.

Key Drivers Behind the Rally

• The surge is mainly driven by domestic retail margin traders and foreign retail inflows, with many investors also speculating through CSI 300 futures contracts.
• Optimism about new developments in artificial intelligence has boosted chip-related stocks, contributing further to market momentum.

Market Responses: Strategy and Caution

• Some brokerages and fund managers have responded to the intense trading by cutting financing and limiting new purchases in order to cool the market.
• Leading investment banks are split on their outlook: Goldman Sachs has raised its target for Chinese stocks, while Morgan Stanley warns that signs of overheating are appearing.

Manufacturing PMI Remains Weak

Despite the bullish stock market, China’s manufacturing sector is still struggling. The latest poll of economists predicts that the official manufacturing PMI (Purchasing Managers’ Index) will stay below 50 for the fifth straight month in August, signaling continued contraction. The index is expected to be at 49.5 for August, up slightly from 49.3 in July.

• Factory activity remains dampened by extreme summer weather and government steps to reduce excess capacity.
• The PMI has been in contraction since April, following increased trade tensions between the US and China.
• Official data from China’s National Bureau of Statistics is due to be released on Sunday.

Conclusion

In summary, August 2025 marks a landmark month for China’s stock market with record turnover and strong gains in leading indices, especially fueled by retail and speculative activity. However, the country’s manufacturing challenges and global economic risks call for caution moving forward.