China Tightens Margin Rules to Curb Speculative Frenzy in Hot Sectors

Chinese regulators moved decisively to cool overheating equity markets after a record-breaking rally. The China Securities Regulatory Commission raised margin requirements to 100% across all mainland exchanges, effective immediately. This follows seventeen consecutive days of gains for the Shanghai Composite—a streak not seen since the 2015 bull market.

Artificial intelligence and space exploration stocks had become particular focal points for speculative trading. The CSI 300’s 2.2% year-to-date gain builds on 2025’s momentum, with margin debt balances repeatedly hitting all-time highs. Officials emphasized stability over runaway growth during a January 15 conference, pledging to crack down on market manipulation.

The intervention reflects Beijing’s delicate balancing act: encouraging capital markets while preventing bubble risks. Retail investors had been piling into thematic ETFs, particularly in tech sectors. Now, with higher financing costs, regulators aim to engineer a soft landing for what they term 'irrational exuberance'.