From The Financial Times: The fragile banking sector is not the only problem that ought to give Chinese leaders sleepless nights. There are also the country’s stock markets.
The days are long gone when the rising markets of Shanghai and Shenzhen threatened to eclipse Hong Kong as the listing location of choice for the best Chinese companies. Although a handful of locally listed companies have prospered, the markets as a whole have fallen since 2000. Last year, the Shanghai composite index dropped 15 per cent, making it one of the world’s worst performers in spite of Chinese economic growth of 10 per cent.
Instead of complementing bank lending by giving companies another way to finance growth, the stock markets weigh on the banks; many brokers are near bankruptcy and thousands of irate retail investors are in debt.
Thanks to Yong Liu for providing this link through del.icio.us.