At one point in January, more than US$6 trillion ($8.05 trillion) had been wiped off the value of Chinese and Hong Kong stocks from their peak in 2021. History shows that clamping down on short-selling rarely provides the market with more than a short-term boost.
With a recovery in Chinese shares beginning to sputter, the government has announced some of the most stringent measures yet to curb the practice of short-selling in an effort to support the market.
The country’s market regulator forced investors to put more money aside as surety against short-selling positions, and the country’s biggest stock lender halted the practice of loaning out shares. The measures add to earlier restrictions that have failed to halt the decline.
