Chief Economist Warns China of Potential Stock Crash Amid Unprecedented Rally: A Call for Sober Evaluation and Risk Management

Economist advises China to exercise caution following stock surge due to increasing risk of boom-bust

Lu Ting, Nomura's lead economist for China, warns about the growing possibility of a repeat of the 2015 boom and bust cycle in the ensuing weeks.

An economist has issued a warning that a more cautious evaluation is needed following a unique, week-long surge in stock prices after Beijing introduced significant economic policy changes to stimulate growth. This is due to the increasing threat of a potential stock market crash.

"Considering the present market trends and our monitoring of views on Chinese social media, there's an increasing chance of experiencing a boom and bust similar to that of 2015 in the upcoming weeks," stated Lu Ting, the lead economist for China at the Japanese investment bank Nomura, on Thursday.

"Even though investors may continue to enjoy the current surge for the time being… we hope that Beijing could exercise more restraint."

The final size and details of the financial plan may be somewhat spontaneous and unpredictable due to the developing stock market bubble. Despite the fact that the stock market's values and borrowing are still a long way from entering a crisis, China's economy continues to operate under emergency conditions, primarily because of the continuing decline in the property market, as stated by Lu.