A-shares' ban on short selling is actually the most insidious and vicious system for harvesting retail investors.

1. The ban on short selling directly prevents junk stocks from exiting the market through price mechanisms. By holding a large number of shares to reduce liquidity, manipulators can easily drive up the stock price of junk companies by multiples to execute pump-and-dump operations. The tactic of building positions, washing out retail investors, ramping up, and dumping has been used repeatedly for 30 years, causing massive financial losses for retail investors. The lack of short-selling tools leaves retail investors completely unable to deal with declining markets.
2. The ban on short selling widens bid-ask spreads, screwing retail investors. In a market with short sellers, shorts must sell lower to get filled, which narrows the bid-ask spread and reduces the slippage losses faced by retail investors.
3. The ban on short selling drives away market makers and financial derivatives. Without a short-selling mechanism, market makers cannot sell put options to provide protection for traders because market makers must short an equivalent amount of the underlying stock to hedge delta risk when selling puts. If they cannot short, market makers will simply abandon the ability to sell put options, leaving retail investors without instruments like options to protect their wealth.
4. The ban on short selling leads to greater market volatility. Without shorts, the only way down in a crash is herding behavior—chasing highs inevitably leads to cutting losses, and the result is that no bulls ever dare to catch the falling knife, watching large bear candles punch through the floor. But with shorts, the situation is different: shorts will cover their positions and buy in time, providing support to the market. The stock price can see a short-term rebound. This is what's often called the "escape door" in Hong Kong and U.S. stocks, allowing retail investors to get out safely and avoid selling their stocks at the bottom.
5. Short sellers are a Sword of Damocles for any company engaging in financial fraud. Without the fear of short sellers, fraudulent and capital-raising junk companies will no longer have any worries. They will brazenly cheat retail investors out of their money, even converting C-rated bonds into equity issuances and dumping bad debts onto retail investors. This severely damages the productivity and innovation drive of the real economy.
Where there are bulls, there must be bears; where there are bears, there must be bulls. The biggest bears usually live in the same market as the biggest bulls.