Chinese stock market biggest loser with 748 billion dollar slump
Beijing (AsiaNews) - In four years, the Chinese stock market has fallen by 43%, destroying capital to the tune of 748 billion dollars, second only in scope to the recession of the Great Depression of '29. The data once again confirms that the Chinese model based on low wages and export no longer holds.
According to figures published by Bloomberg, in 2009 the Shanghai Composite Index had doubled in just 10 months, thanks to the injection of a government anti-crisis stimulus to the tune of 652 billion dollars, used to build airports, roads, railways, buildings. Four years after the performance, the airports are closed, the railways lead nowhere, houses remain empty and the streets are waiting for someone to use them. These days the same index has fallen by 43% compared to 2009, destroying about 748 billion market value.
In 2009, all the major analysts
praised China for beating the United States in a short time, after outstripping
Germany and Japan. Now
China is getting ready to see its lowest growth rates since 1990, with the
Beijing government ordering the closure of more than 1,400 factories. This
does not include private industries, closed due to lack of loans from the
state.
Yesterday,
the Politburo decided to stablize growth in China operating some economic
reforms, including a prudent monetary and fiscal policy.
In 2008, at the beginning of the global crisis, China was applauded for its stimulus package of about 4 trillion yuan, which also helped other economies, at breaking point. But the injection of liquidity led to speculation, to skyrocketing inflation, with huge debts in the provinces. Now the Politburo and Premier Li Keqiang want to turn China into a nation of consumers, and not only of exporters, with a yuan kept artificially low.
Meanwhile, the stock market is
being defined by some as "a dead animal," incapable of generating wealth.
For
nearly 30 years, China has had an average annual growth of 10% and more. This
year it is not even likely to reach the government forecast of 7.5%.
Faced
with all of these signals of the imminent slump - industrial production, bank
loans, growth, etc ... -
Some analysts remain optimistic: "Most of the world - says Ken Fisher of
Fisher Investments - would love to have China's growth rate when it is on the
low end. We are optimistic on China."
12/11/2008
05/12/2016 09:37