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Chinese stock markets are having their best week in over a decade. Indeces of major stock markets in the country have seen their values soar over the past five days, with the Shanghai Stock Exchange Composite Index up over 21%, the CSI 300 Index up over 25%, and the Hong Kong Hang Seng Index up over 15%.
The Shanghai Composite Index surged 8% Monday to stretch September's gain to 17%, marking the best rally in 16 years.
Amid an influx of aggressive government stimulus measures, the Chinese stock market is reacting positively, hitting new historical highs.
Last week, China's central bank announced plans to cut banks' reserve requirement ratio (RRR) by 50 basis points or half a percentage point, boosting the stocks of U.S.-listed Chinese companies across sectors.
Chinese equities capped their biggest weekly rally since 2008 with a burst of trading that overwhelmed the Shanghai stock exchange, underscoring a shift in investor sentiment after Beijing ramped up its economic stimulus. That shift was felt in Chinese stocks in the US as well, where they're set for their best week since 2022.
No exchange-traded funds (ETF) have had a week quite like iShares MSCI China ETF (MCHI) and iShares China Large-Cap ETF (FXI).
China ETFs have surged on the back of a blitz of stimulus measures by the country's government to revive the world's second-largest economy.
Bill Bishop, publisher of the Sinocism China Newsletter, and Derek Scissors, Asia economist at the American Enterprise Institute, join CNBC's 'The Exchange' to discuss China's recent stimulus package, how long its rally can last, and more.
China's slowing economy needs more than interest rate cuts to boost growth, analysts said. "We will need a major fiscal policy support to see higher CNY government bond yields," said Edmund Goh, head of China fixed income at abrdn.
Chinese stocks and the exchange-traded funds that track them surged Tuesday after Beijing announced the biggest stimulus package since the early days of the COVID pandemic, sparking what some analysts see as a tradable rally.