Skip to main content

Chinese Stock Market And The World

From a Guardian article last July

China’s efforts this week to stem the tide of losses on its main stock market failed on Friday when the Shanghai Composite index plunged a further 5.8%, taking the drop in share values to 28% since their June peak. 
Panic selling wiped more than £2tn off the value of Chinese-listed companies and traders signalled the rout would extend into next week. 
The authorities had cut fees and eased borrowing rules that make it cheaper to buy shares in the hope it would cheer investors battered by the relentless selling since 12 June. 
A promise by the main stock market regulator to tackle concerns of market manipulation, which has sapped investor confidence in recent days, also failed to halt the slide.

In article last August the Washington Post commented

At the moment there’s panic in the market, because we have lots of retail investors,” said Wei Wei, an analyst at Huaxi Securities in Shanghai. “We’ve never experienced anything like this in China’s stock market, the speed of the decline and the scale of it."

The Chinese stock market is quite small. That is, there are not many investors compared to the size of the economy and the number of Chinese people.

So the ups and downs of the market might not reflect the direction of the whole economy, particularly if the investors have not learned to hold rather than sell at the first tremor.

Yes, there's that. But there are other factors. There is the sanctity of the dollar. There is the size of China's foreign dollar holdings. There is the question of relations with the West and the ongoing sanctions against Russia.

There is a lot that is not obvious and which may play a part in what is happening. I don't see how it all works, but I sense that what is going on may not simply be a slowdown in the Chinese economy.

Comments

Popular posts from this blog

MarsEdit 4

I've been using MarsEdit for just over seven years. I started with version 2, and then upgraded to version 3 in 2010.Now, in 2018, I just upgraded to version 4. This is my first post with the upgrade and I'll report on it in a little while as I get used to the new version.Here is what Daniel of Red Sweater Software has to say about his product:Browser-based interfaces are slow, clumsy, and require you to be online just to use them. Browsers are perfect for reading web content, but not ideal for creating it. If you're serious about writing for the web, you need a desktop blog editor. If you're lucky enough to have a Mac, nothing is more powerful, or more elegant than MarsEditRich and Plain Text Editing MarsEdit's editor switches easily from Plain to Rich Text, so you can work in whichever format you prefer. Love Markdown? MarsEdit can preview it and convert it to HTML if needed.Wildly Compatible Works with WordPress, Blogger, Tumblr, TypePad, Movable Type, and any …

Resistance Is Futile

Some of the trains that run from London Kings Cross to Cambridge divide at Cambridge. Part of the train goes on to Kings Lynn and the rest stops at Cambridge and does the run back to London. Perhaps it picks up other carriages coming from somewhere else, I don’t know but it seems likely.When you get on the train and before it sets off, there’s a public announcement announcing how the train divides. It explains that the train is composed of eight carriages and that passengers wanting to travel beyond Cambridge should ensure that they are in the front four carriages.The rear four carriages are of course nearest the barrier, so we choose to sit in one of those carriages if for no other reason than that we don’t have to walk so far to find a seat.So there we are and the voice comes over with the announcement. And then there is a pause and then a voice tells you what carriage you are in. So we hear ‘Six of Eight’ or ‘Seven of Eight’ – and every time I hear it I think of Star Trek, ‘Three o…

Business For Britain Is Concerned With Business For Britain

This report in the New York Times today


LONDON — Is British business fretting about the risks of the country drifting out of the European Union? Or does it crave a looser relationship with Continental allies, one free from meddlesome regulation?
The answer to that question remained unclear Monday after a newly formed group of business leaders argued for a renegotiation of Britain’s membership terms — echoing the policy of Prime Minister David Cameron, who in January promised voters a referendum on whether the country would remain in the Union.
The new group, called Business for Britain, is intended to counter the intervention of pro-E.U. business leaders who have warned of the dangers of Britain slipping out of the 27-nation bloc and its single market of 500 million people. A statement released Monday to announce the group’s formation was signed by about 500 executives.
I think this opinion in the New York Times article is interesting:

Never much attracted to the idea of European unity,…