Beijing Picks Inaction

By Colin (Huaizhi) Chen

Yesterday, in the Wall Street Journal Asia, there was a front page article titled “China Markets Unsettled as Beijing Picks Inaction” on the belief that the Chinese Government has no intention of government intervention in the declining Shanghai and Shenzhen Stock Exchanges. I found this quote to be most interest:

“Privately, Chinese officials say that they are trying to shake off their interventionist image and that investors need to appreciate that official's role is to set market parameters, not dictate stock prices. And senior leaders kept mum about soaring stock values last year, when others openly referred to the market as a bubble.”

Alas to the poor Chinese investors, this is necessary medicine as China moves toward a legitimate equity market.

- H