My Take | China’s stock-market frenzy reflects social media’s growing influence on retail investors

China’s latest stock market rally has quickly turned retail investors’ mood across the country from extremely bearish to very bullish, as domestic social media fans a growing sentiment of FOMO – the fear of missing out – even though another round of volatility could be just down the road.

After Beijing on September 24 announced a slew of measures described as the “most significant stimulus package since the early days of the pandemic”, major stock indices on the mainland and in Hong Kong saw daily transactions soar to record levels. That reflects the rush to build bullish positions by retail traders and money managers, including those who were burned during China’s great market crash of 2015.

That investor euphoria, aroused by the proliferation of upbeat short-video posts on Chinese social media, has put the three major stock markets of Hong Kong, Shanghai and Shenzhen firmly in bull-market territory.

What is unfolding could well be the nation’s first bull run in the era of ubiquitous short-video sharing in Chinese social media, a segment dominated by ByteDance-owned Douyin, the mainland version of TikTok, as well as Tencent Holdings-operated WeChat and Kuaishou Technology.

Social media’s influence on retail investors, particularly amateur traders, initially gained major attention in the United States via the so-called meme stock phenomenon, which involves retail investors hyping up stocks on platforms such as Reddit, Facebook and Twitter, now known as X. One notorious example is US bricks-and-mortar video game retailer GameStop, which saw a buying frenzy organised by a group of amateur investors on Reddit.