China Stocks Down 50% in 6 Months

online.wsj.com...

The sharp decline in Chinese stocks is approaching a milestone: With a 4% drop Friday, the market has fallen by nearly half since its peak last fall. The decline has wiped out nearly $2.5 trillion of wealth and is testing the government's apparent resolve to let the market find equilibrium on its own.

The plunge has slashed the savings of millions of Chinese investors who jumped into the market as it rose six-fold in two years. It is crimping expansion in the country's nascent financial sector and may put a squeeze in corporate coffers. But so far, it has not slowed the world's fastest-growing major economy.

Man, and we think our stock market is tanking. 50% decline is brutal. I wonder why the media isn't covering the effects that this is having on the Chinese economy. I have read articles that are very similar to the US before the depression. People quitting their jobs to put everything into the market, people borrowing money to put in to the market... etc.

Now it is collapsing, it has to have a very negative effect. Especially considering the rising costs of food and fuel. Is this being widely covered and I am just misssing it?

Es


[edit on 21-4-2008 by Karlhungis]

it is widely covered in China (mainland, Hong Kong and so on).

However, to me this is nothing but a normal correction of a huge bubble that inflated the market prices ridiculously in the stock market. When you start to hear stories that a recently bankrupted factory is still billions of Chinese yuan worth because speculators are playing for a rescue, then of course these gamblers deserve to learn a lesson.