China’s stock market has been on a roll — is it a boom or a bubble?

China’s stock market has seen a sharp rally this year as progress on artificial-intelligence, steps aimed at gaining chip self-sufficiency and Beijing’s campaign to rein in price wars fuel investor optimism. But as retail investors push the market higher, and bulls cheer liquidity support and policy tailwinds, some experts are raising questions if the market is entering bubble territory.

The mainland CSI 300 index has climbed about 16% since the start of the year and is hovering close to more than three-year highs. The CSI 300 Information Technology Index, which measures the performance of tech companies within the CSI 300, last week hit its highest level since 2015.

“China’s ongoing equity rally appears disconnected with the economic fundamentals,” said Raymond Cheng, regional CIO for North Asia at Standard Chartered, adding that “retail investors have played a key role as they have been shifting some of their bank deposits into equity markets.”

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