Chinese Margin Debt Hits Record $322B Amid Regulatory Caution

Outstanding margin financing in China surged to a record 2.3 trillion yuan ($321.55 billion) this week, fueling a rally in Shanghai shares to decade highs despite economic headwinds. Retail traders, including Beijing programmer Cassiel Jiang, Leveraged consumer credit and brokerage loans to chase gains—only to face abrupt reversals as regulators signaled tighter oversight.

The blue-chip CSI300 Index dropped 2% Thursday following reports of regulatory scrutiny, with tech darling Cambricon plunging 15% after a speculative doubling. "If you haven’t taken profit at a peak, you wonder if you should cut the loss after you start bleeding," said Jiang, now reducing exposure to sleep easier.

Securities chief Wu Qing’s pledge to promote "long-term, rational, value investment" underscores Beijing’s balancing act: sustaining market confidence while deflating bubbles. The liquidity-driven frenzy reveals structural vulnerabilities—leveraged retail participation remains the powder keg beneath China’s financial ascent.