JUST RELAX ABOUT CHINA'S STOCK MARKETS

 
Geoff Dyer
Friday, June 01, 2007
 
 
Two mornings every week, a friend of mine goes to a park in central Shanghai to practise T'ai-chi, the Chinese exercise regime sometimes known as meditation in motion. The group of mostly retired Chinese is led by an elderly gentleman who mixes strict punctuality with a certain eastern mysticism.

My friend was there on a cold February morning the day after the local stock exchange had fallen 9 per cent, spooking the rest of the world's markets. The group was halfway through their hour-long sequence of movements when the leader cut them abruptly short. “I have to leave early to get to my stockbrokers before the market opens,” he announced. “Because today is a buying opportunity.”

Everyone who lives in a Chinese city at the moment has a story to tell about the stock market craze and most have a similar theme: fascination with the sheer dynamism of the boom and fear at the occasional recklessness.

Having watched share prices quadruple in two years, more than 100,000 Chinese have been opening trading accounts every day in recent weeks as a new generation of middle-class Chinese has gained a taste for playing the market.

But in a nation where the urge to gamble is never far below the surface, the stock market has sometimes come to resemble a casino. People have taken out loans to speculate, while a few individuals have even pawned their houses to buy shares. The education ministry last week warned university students not to be distracted by investing. Eccentric investment theories abound: some are looking for shares with a price less than the cost of a kilo of pork, on the grounds that such a company must be a very good bargain indeed.

The 6.5 per cent drop in the market yesterday is a grim reminder of how this story could end: a collapse in the Shanghai market with the people who came in at the end of the party picking up the tab. So irrational is the exuberance in China that even Alan Greenspan, former chairman of the US Federal Reserve, is worried.

But will the damage stop there? In the early stages of the market boom, gung-ho Chinese speculators were considered a mild curiosity. Yet as the rally has gathered pace over the past month or so, some international investors have begun to fear the potential global fallout from Shanghai's excesses. They have started to ask what would be the impact from a crash not just on the Chinese economy but also on global iron ore consumption, Latin American trade surpluses and Treasury bill purchases.

The answer is, well, pretty much nothing at all. If the mainland market were to drop by a further 20-30 per cent, the Chinese economy would barely miss a beat.

For a start, there would be no domino effect of forced selling in one market pulling down others. Given the wall of capital controls that Beijing maintains for its currency, the mainland stock market is a parallel universe, detached in any real sense from other markets, with little money coming in to the country to invest in shares and little going out. Foreign investors have only a very modest exposure to mainland equities. Indeed, capital controls explain why share prices in Shanghai are so high: people have few other places to put their money.

Despite the recent boom, the stock market is still a relatively small part of the economy, even by the standards of emerging Asia. The massive investment surge in China has been financed largely from corporate profits, not from the capital markets, and would carry on at a relentless pace.

It is possible that consumption growth might be modestly held back, but retail spending was already surging before the market rally began. Most of the new funds have come from savings, not credit, and the Chinese still have $2,000bn in bank accounts to fall back on. Consumers can withstand a large correction.

The Shanghai market still has the power to scare the world – we saw that in February. In markets, if enough people think something is important then it is important, whatever the underlying logic. If global equities are overvalued and due a correction, investors do not need a good reason to start selling, just a popular one.

But for investors comfortable that strong global growth underpins the rise in share prices around the world, a collapse in Shanghai is an occasion to hold one's nerve and remain calm. Maybe even try some T'ai-chi.

The writer is the FT's Shanghai correspondent。

中国股市将如何收场?

 
作者：英国《金融时报》记者杰夫•代尔(Geoff Dyer)
2007年6月1日 星期五
 
 
每周有两个早晨，我的一位朋友都会去上海市中心的一座公园练太极拳——一种有时被称作在运动中冥想的中国锻炼方式。这群人大多数是退休的中国人，牵头的是一位老先生，他把严格的时间规定和某种东方神秘色彩结合在了一起。

在2月份一个寒冷的早晨，也就是上海股市下跌9%、震动了全球其它市场的第二天，我的朋友正在那里练习。这群人一小时的运动刚刚进行了一半，领头人就突然打断了他们。他宣布：“我得早点走，要在市场开盘前赶到证券公司，因为今天是个买入的机会。”

当下生活在中国城市的每个人都能讲出一个关于股市疯狂的故事，而且大多数都有着类似的主题：对股市热潮惊人活力的痴迷，对偶然莽撞的恐惧。

在看到股价两年之内翻了两番后，最近几周，每天都有超过10万中国人加入到股票账户的开户行列，因为新一代中国中产阶级已开始喜欢股市投资。

但在赌博欲从来都没有掩藏得太深的中国，股市有时就像赌场。人们开始用贷款进行投机，甚至还有一些个人当掉房子来买股票。中国教育部上周警告大学生不要因投资股市而分心。奇怪的投资理论到处都是：一些人去寻找价格比猪肉还便宜的股票，理由是这样的公司肯定是地道的便宜货。

上海股市周三6.5%的跌幅无情地提醒着投资者，这样的股市将如何收场：上海股市崩盘，最后进场的人买单。中国股市的繁荣是如此缺乏理性，甚至连前美联储(Fed)主席艾伦•格林斯潘(Alan Greenspan)都表示了担忧。

但危害仅只于此吗？在市场热潮初期，齐心协力的中国投机客被视为一个有些奇异的群体。但随着过去一个月左右市场的加速上扬，一些国际投资者开始担心上海股市过度投机对全球市场的潜在影响。他们开始想知道，上海股市的崩溃，会对中国经济，乃至全球铁矿石需求、拉美贸易盈余和美国国债购买产生什么影响。

答案是，几乎根本没有影响。即使大陆股市再下跌20%到30%，中国经济也不会乱了步伐。

首先，不会出现一个市场被迫遭到抛售带动其它市场下跌的多米诺骨牌效应。鉴于中国政府维持着人民币的资本控制防护墙，大陆股市是一个独立王国，与其它市场没有任何实质性的联系，很少有资金进入中国投资于中国股市，也很少有资金流出。外国投资者在中国大陆股市的投资量很小。确实，资本控制能说明为什么上海市场股价如此之高：人们可投资的地方很少。

尽管近期大幅上涨，但中国股市在经济中所占的比例仍相当低，即使按亚洲新兴市场的标准衡量也是如此。中国大规模投资增长的资金来源主要是企业利润，而非资本市场，并且将以稳定的步伐继续下去。

消费增长有可能稍微受到遏制，但零售支出在股市大涨之前就已经开始攀升了。大部分新资金来自储蓄而非贷款，而中国人在银行账户里仍然有2万亿美元存款以供不时之需。消费者能够承受一次大幅度的股市调整。

上海股市仍然有能力让全世界震惊，这一点我们在2月份已经见识到了。在市场上，如果有足够多的人认为某件事情重要，那它就是重要的，无论背后的逻辑是什么。如果全球股市已被高估，应该出现回调，那么投资者开始抛售就不需要一个好理由，一个普通的理由即可。

但对于那些相信强劲的全球经济增长给全世界股价上扬提供了支撑的投资者来说，面对上海股市的暴跌，他们应当鼓起勇气保持平静。或许可以去尝试打打太极拳。

本文作者是英国《金融时报》驻上海记者。