Chinese Investors Wait in Vain for Government Help

From MarketWatch:

Frustrated mainland Chinese investors, who have watched the country’s main stock market in Shanghai plummet more than 40% since October, have been wondering when their typically hands-on government will move to reverse the fall.

The word from Beijing: It just might not. Repeated calls for China’s financial authorities to prop up the country’s sharply deflated stock market have gone largely unanswered as the government directs its focus on combating inflation. That’s a surprise to many Chinese investors, who are used to government control of everything from the price of gasoline to how many children they can have. To make matters worse, they’ve also seen the Federal Reserve cut interest rates and rescue Wall Street investment banks to keep the U.S. financial system running smoothly, which has perked up stocks. “The U.S. government is intervening to boost the markets, why can’t China?” said Xu Xiaonian, professor of economics and finance at China Europe International Business School, in a telephone interview.

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