China stock market characterized by leverage and non-market measures Increasingly it seems this will be China’s approach to its entire economy Fueled largely by leverage (buying on margin increased 500%),…
In light of all the bad news being reported from China—a slowing economy, mounting debt, rising costs, an increasingly hostile environment for foreign companies, and a political clampdown—we have prepared this series of blogs with the intent of providing some perspective to the dire assessments and predictions that have become so common of late.
Is a hard landing for the economy unavoidable? Given all the bad news being reported from China—a slowing economy, mounting debt, rising costs, an increasingly hostile environment for foreign…
Is China losing its competitiveness? Given all the bad news being reported from China—a slowing economy, mounting debt, rising costs, an increasingly hostile environment for foreign companies, and a…
Is China becoming less welcoming to foreign companies? Given all the bad news being reported from China—a slowing economy, mounting debt, rising costs, an increasingly hostile environment for foreign…
Is political risk in China growing as the new administration takes a hardline on many issues? Given all the bad news being reported from China—a slowing economy, mounting debt,…
America has been humiliated. Her allies stabbed her in the back and sold out to China. And China has just bought a huge amount of influence on the world stage. At least, that’s what the headlines say.
Bulls & Bears: China’s Stock Market
We do think that the decisive factors in the Chinese market are the explosion in leverage (margin buying) that occurred on the way up and the extremely high PE valuations. Any market built on such conditions will surely fall. How far is hard to say, but continued rise looks very difficult and unstable. As to the economic fall-out, the short term impact looks to be minimal. But China has greater economic challenges.