Despite the worries in the Eurozone and the Greek Debt
Crisis, analysts said investors should be pointing their direction somewhere
else, namely in Southeast Asia. China, one of the world's economic powerhouses,
is facing a slowdown and a possible slump that could only parallel the 1929 Great
Depression.
"China's Market Meltdown", as the media had
coined it, is stretching on its third week. Shanghai share prices had lost a
third of its value since mid-June. Chinese regulators warned that investors may
panic and pointed out that the economic crash could spell doom for the world
economy.
Stocks
Have Been Failing Why?
Chinese stocks have been failing because of its consecutive
propping up of bubbles. This is similar to the symptoms that brought down the
US era of "the roaring 20s". With so much inflation coming from
normal "small investors" or "chao gu" investors, the
inflation cannot be helped.
But analysts said gravity has caught up with the
overvalued stocks.
China
Cannot Manage Its Assets Effectively
The Chinese stock market is supported by government
support for share prices. The People's Bank of China has cut interest rates to
a record low. With brokerages going about the thousands suspending their loans from
being traded, the world continues to watch Chinese stocks continue to fall.
Chief Economist For Asia for Credit Suisse Dong Tao
said Beijing fears the stock rout may undermine consumption and prevent losing
consumer spending.
But investors are not confident in China's efforts to
secure as the stocks continue to "flicker and fade."
