Monday, November 15, 2010

China's Stock Market

From a Jason Zweig article published in the Wall Street Journal last month:

...the leaders of China's Communist Party called for "accelerating the transformation of the nation's economic-development pattern." This drive to manage growth harks back to a declaration on April 22 that "of the many government functions, the most important is to facilitate commerce and help industries."

That was said on Aprill 22, 1903. 

So China's growth understandably creates excitement but:

...the Asian giant has run this exact race before—several times—and the results weren't pretty.

The growth in the Chinese economy is real, and I don't mean to sniff at it. But stocks require more than growth alone to be profitable; they also need good oversight by bureaucrats and corporate managers alike.

At the very least, this provides some historical perspective and food for thought.

Check out the full article.


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