China's $19 trillion stock market is experiencing a notable recovery in 2025, with the Shanghai Composite index up 17% this year, outperforming global benchmarks despite previous economic concerns. This revival comes after Evergrande's 2023 bankruptcy and follows stimulus measures introduced by the Communist Party in 2024. While foreign direct investment has declined 13.2% in early 2025, the government has implemented numerous policies to attract investors, including expanded access to healthcare and telecommunications sectors and reduced manufacturing restrictions. The biopharmaceutical industry showcases this renewed interest, attracting $4 billion in foreign investment—six times last year's figure. Attractive valuations, with Chinese equities trading at a 47% discount compared to US stocks, continue to drive institutional investor confidence despite ongoing economic challenges.
