Analysts point out the similarities in China’s bull market to Japan’s situation that led to a financial crisis in 1990. One economist compares China to a “giant elephant riding a bicycle – it has to maintain a fast speed, otherwise it will crash.” From AP via insidebayarea.com:
When financial crisis devastated its Asian neighbors a decade ago, China sat safely on the sidelines, its own markets and banks largely closed off from the world and insulated from the upheavals wracking more open economies.
But today, China could be ripe for a crisis of its own that might resemble the collapse of Japan’s “Bubble Economy” in the early 1990s ” and have enormous global impact, analysts warn.
Just as in Japan at that time, stock and property prices here are soaring. Banks have lent billions to build malls, office towers and apartment buildings ” although many remain unfilled. [Full Text]
