China’s Yuan Strength and Stock Rally Reflect Economic Shifts

China’s central bank has signaled growing confidence in the yuan, lifting its daily reference rate to the highest level in nearly a year. A stronger currency enhances household purchasing power and could stimulate domestic consumption, while also deflecting global criticism of deliberate currency weakness for export advantages. Investor sentiment benefits as low volatility and anticipation of further gains attract global funds.

The stock market surge underscores renewed optimism, with the CSI 300 Index climbing nearly 10% in a month. Record-breaking turnover highlights frenzied participation from domestic traders, foreign investors, and speculators. Sectors like artificial intelligence and chipmaking drive momentum, though lingering uncertainties around U.S. tariffs and trade talks temper unbridled enthusiasm.