Shanghai Stock Market Hits 5000 + 2 China Blog Posts of Note
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as they have predicted. I expect to see the stock market a good deal higher within a few months.”
(Dr. Irving Fisher, a respected professor of Economics at Yale University who was one of the most influential economists of the era, speaking on October 17, 1929 – weeks before the Great Crash.)
Shanghai Stock Market Passes 5000 on It’s Way to the Moon
Well, it was bound to happen sometime (now or years from now). The Shanghai Composite Index finally passed 5000 yesterday, up from about 1000 at the beginning of 2006. If you have been reading this blog for any significant amount of time, you know what I think is most likely to happen from here. But most people in China would disagree. The latest widespread dogmatic belief is that what happens in the rest of the world will not affect China… that China is somehow disconnected from the rest of the world.
China Blog Posts of Note
While we wait to see how the craziness of China’s stock markets play out, here are two interesting posts from the past week in the China blogosphere (there are very, very few interesting China related posts from the last couple of weeks, what’s going on?):
- US Consumers Changing China? by China Law Blog – While on the surface of things, it seems like US consumers wield enormous power over Chinese manufacturers (if they can come together to wield such power), the reality is a bit more complex. How so? US consumers already have far less power than they realize, buried in debt and seeing their ability to borrow cheaply cut off at the knees. The flip side to this picture, though, is that Chinese manufacturers will have to fight even harder to keep their fingers in the declining purchasing power of the typical US consumer. As US consumers grow weaker, their power over Chinese manufacturers, for a time, may in fact grow stronger (until such time as they diversify their business or go bankrupt). Read the article above for a different view of things.
- Chinese Version of “The Birds and the Bees” – What’s better to tell your children? You were carefully delivered by a stork in the sky or you were found in a trash heap? In China, it’s more likely to be the trash heap story. Mike Bai tells all.