The article from Caixin Weekly by Yue Yue Quan Yue, titled “Cover Story | The Live Broadcasting Era of A-Shares,” delves into the changing dynamics of China’s securities market, driven majorly by the rise of live streaming and short video platforms as key players in the investment sphere[para. 1].
The story opens with Old Li, an
executive at a mid-sized brokerage firm,
who reflects on how platforms like Douyin and Kuaishou,
once considered a waste of time,
are now integral to his work.
Li observes significant changes in the market landscape,
highlighting the role of live streaming in investor engagement,
particularly amid a surge of retail investor account openings.
His firm,
experiencing brisk online account opening activity,
saw account numbers soar to 6.84 million in October 2024,
echoing earlier booms in 2015[para. 1][para. 2].
The new wave of investors largely comprises younger generations born in the 1990s and 2000s—digital natives unfamiliar with traditional financial approaches but attracted by the thrill and entertainment intersecting the contemporary investment landscape[para. 3]. Zhang Xiaoyan from Tsinghua University emphasizes how these young investors view investing simplistically, correlating it to gaming[para. 4].
Old Li notes the vital role social media and short videos play in shaping market trends, attributing a majority of the new account openings to these platforms. Data shows platforms like Douyin,
Kuaishou, and Xiaohongshu serve as sources for speculative investing advice, leading some investors towards less informed decision-making patterns characterized by whimsical trading and a reliance on influencer suggestions[para. 4][para. 5].
Moreover, short videos and live streams have contributed to the gains in small and mid-cap stocks. Data from September to November suggests that smaller companies in the CSI 1000 and 2000 indices reported gains averaging over 40%, contrasted with the larger blue-chip index gains below 30%[para. 6]. Despite the rise in retail investor involvement, historical challenges, such as market manipulation and improper conduct, persist as exemplified in regulatory scrutiny of suspicious activities and false reporting incidents noted about 270 times by the Shenzhen Stock Exchange in November 2024[para. 7].
The reportage also contrasts the investment trends in U.S. markets with the highly retail-investor-dominated Chinese market. In the U.S., retail participation shrunk over the decades, implying a different trajectory compared to China’s vibrant new investor base[para. 8]. The role of influencers, presenting simplified and often misleading stock recommendations for online audiences, is under regulatory spotlight for its potential to manipulate or misguide retail investors[para. 9].
Influencers in China,
even without professional credentials,
can impact stock movements when they discuss investment opportunities in accessible and engaging manners,
like the banned Douyin influencer “Da Lan”,
who allegedly influenced stock prices through speculation and promotions[para. 10].
This contrasts with U.S. regulations, which require influencers providing paid investment advice to register with the SEC[para. 11].
Regulatory bodies such as the China Securities Regulatory Commission are tackling these issues, driving compliance in financial advisory sectors, and aiming to curb potentially manipulative practices[para. 12]. Despite increased scrutiny, challenges remain due to the wide reach of social media and the nuanced nature of investment advice provided through these platforms[para. 13].
In conclusion, the article outlines the rapidly evolving digitalization in the Chinese securities market, with significant engagement from younger retail investors driven by technological advancements in live streaming and social media. These platforms amalgamate traditional stock trading with elements of entertainment and social interaction. This nascent phase calls for tighter regulatory frameworks to enhance investor literacy and safeguard market integrity in an era where access to information and investment is democratically extensive yet fraught with high-risk behaviors[para. 14][para. 15].
AI generated, for reference only
