China’s Investors Are Losing Faith in Its Markets and Economy

Like many Chinese people, Jacky hoped that he could make enough money investing in China’s stock markets to help pay for an apartment in a big city. But in 2015 he lost $30,000, and in 2021 he lost $80,000. After that, he shut down his trading account and started investing in Chinese funds that track stocks in the United States.

It’s a perilous time for investors in China. Their main vehicle, so-called A shares of Chinese companies, fell more than 11 percent in 2023 and have continued their losses this year. Many investors have instead flocked to the exchange-traded funds that track foreign markets and that have been performing much better.

Putting money in stocks is inherently risky. But Chinese investors are experiencing something especially alarming: financial losses in the markets, declining home values and a government that doesn’t want any public discussion of what’s happening.

With their frustrations piling up, Chinese investors recently found a way to vent that wouldn’t be quickly censored. They started leaving comments on an innocuous post about giraffe conservation on the official Weibo social media account of the U.S. Embassy in China. They lamented the poor performance of their portfolios and revealed their broader despair, anger and frustration. The giraffe post has been liked nearly one million times since Feb. 2, much more than what the embassy’s Weibo posts usually get. Many of the comments also offered admiration for the United States, as well as unhappiness about their own country.

“The different stock markets’ performances reflect the distances between America and China in terms of national power, technology, humanity and sense of well-being,” a commenter wrote.

The comments demonstrate a growing loss of confidence by the Chinese public in the stock market, the country’s economic prospects and the Chinese Communist Party’s ability to govern.

“Their reactions are more than about losing money in the markets,” said Jacky, an analyst in the manufacturing industry who is earning half of what he was making two years ago and is juggling several jobs. “The venting probably serves as an outlet for their accumulated frustrations in life.”

Another investor I spoke to, Leo, a portfolio manager at an asset management company in Beijing, has been investing in China’s stock markets for nearly a decade. In November, he started closing out his positions. Now, like Jacky, he is placing his bets on overseas markets.

Leo said he used to hope that China’s internet giants Alibaba and Tencent would become $1 trillion companies like Amazon, and that investors like him would benefit from their growth. “That dream was shattered” after the government cracked down on tech in 2020, he said. “I can only look to the overseas markets now.”

The American Embassy’s Weibo comments section once served as an online punching bag for nationalistic Chinese who blamed the United States for their country’s problems. Now it’s called the Western Wall of China’s A shares investors.

“Under the protection of the U.S. government,” wrote one commenter, “the giraffes are 10,000 times happier than the Chinese stock investors.”

In a tightly controlled society like China’s, it’s rare to see such a robust expression of public sentiment. The comments could also serve as a harbinger if the economy doesn’t recover soon. Despite being bombarded by propaganda and intimidated by the government, people may continue to question their government and find creative ways to express their discontent.

It’s always tough to gauge public sentiment in China. People dare not publicly say anything critical about their government. Now even critical comments about the economy are censored and punished. That’s why both Jacky and Leo asked me to use only their English names for fear of reprisal.

Still, online outbursts by large groups of people can offer clues about public sentiment. Take, for example, the grief that followed the death of Li Wenliang, a doctor who blew the whistle in the early days of the pandemic. And the widespread mourning after the unexpected death last year of former Premier Li Keqiang, a reformist politician who accomplished little under the country’s leader, Xi Jinping.

Those episodes showed the public’s disapproval of censorship and doubt about the direction that Mr. Xi is taking the country. The comments on the U.S. Embassy’s Weibo account belong in this category.

Valuable insights into what people are feeling occasionally emerge in unexpected places. A recent survey by the Canton Public Opinion Research Center offered a bleak picture from the southern city of Guangzhou, a metropolis of nearly 19 million people and a hub of technology, manufacturing and trade. In a 2023 survey of 1,000 residents, the center found that the city’s “economy and the society were confronted with unprecedented challenges and pressure.”

The research center’s report said residents’…