China's Vice President has assured investors that their [the Chinese Government] will keep intervening in the stock market to ensure a few speculators don't benefit at the expense of regular investors. http://www.bloomberg.com/news/artic...ent-vows-to-look-after-stock-market-investors But since China's stock market is still quite volatile I think it will take more than assurances of [more] regulation to draw investors back.
Governments should only keep everyone honest - not limit how, how much, and how often investors and traders can invest and trade their own money. Real, honest-to-goodness volatility with real, honest-to-goodness dollars should not be something government tries to limit or stop. Let the market sort it out.
Agreed. China loves being big brother to their people, but even they have to know when enough is enough and not to let their own desire for control keep people from investing and using the stock markets that they have. If they don't, they're only going to make their own economy more difficult to manage and limit themselves using the same strategy they've used for such a long time. In a new world, you need new strategies, and I don't see China's control over the stock markets bringing confidence or a new edge that their people need to overcome the decline of it.
That gesture of China's vice president is a noble reaction to the volatile stock exchange. China is a big market and any foreign industry player is wishing to get inside China. That's how lucrative China is so it is only right that they protect their stock market for their economy is based on that. And with the strict government rule of China, I guess controlling the stock market is an option to them.
The government are still struggling with the keeping the people happy vs. free market dynamics. Getting involved in stock markets shouldn't be the role of the government but this is China here. Ultimately it's about educating the new investor public to the risks inherent in stock investing without setting the risk of moral hazard and the idea that the government will always step in when things go wrong.
I always see gov´t intervention in the stock market the same way I see it when scientists try to introduce some new species into an ecosystem for a certain reason. It usually backfire and has unintended consquences that are much worse than the original problem. For instance their attempt at circuit breakers a few weeks ago. All it did was created panic selling as people tried to unload stuff before the breakers kicked in.. and it was obvious that once the 15 minute breaker kicked in at 5% that it was just going to create so much stress that the 7% daily breaker would be triggered in just seconds. While in theory it sounds good that the 15 minute delay gives people time to ´think´ about things, the fact is that being locked out of trading is a stressful thing. It makes you want to toss the hot potato before the suspension takes place
I think this move by the Chinese Vice President is an assurance for investors that despite the volatility of their market, the government is keeping a close watch on it to prevent more losses for investors. At least they are assured that the government is protecting their money from the downfall they are experiencing right now.
Oh well in that case then nobody as any need to worry then do they as we can trust the Chinese 100% can't we? Sense the sarcastic tone? Seriously though I think there will come a point in the future were they will have to say that they can't or won't support it any more. That may not be till a long time off yet, but nobody can say forever about anything.
Is there any updates on this issue? I guess the China stocks have somehow stabilized although they are also affected by the volatile prices of oil products. And if the unstability of oil prices lingers, the manufacturing industry of China will be greatly affected since most of their factories are using generators run by crude oil. That would be another stock market issue.
Corzhens, I suggest you can research the updates for yourself. You might start with some of the Chinese newspapers: (1) People's Daily; (2) Shanghai Daily; and (3) South China Morning Post. There are other newspapers with English language sites, but I don't find as much business news on them. I also look at Caixin, another source of financial news, and China Daily. Note on some sites you may have to look under Business or Politics headings. HTH. YMMV.
