First Cracks Begin to Appear in China’s Economic Boom
January 23, 2008 | 10:45 am | by t-blender |Rate It:
the independent: At trader haunts in Beijing and Shanghai, the usual chatter is of the overheating economy, of double-digit growth and how China will function as the economic engine of the world during a slowdown. No one mentions the dreaded word sub-prime over cocktails at Centro or “M on the Bund”.
But, while Asia is still expected to be the world’s top-performing economic region, the focus is increasingly on how China weathers what looks like its first storm. The spillover from the sub-prime investment downturn appears to be hurting even China and the country is gearing up for the first significant hurdle in two decades of breakneck growth.
In line with the global sell-off, Shanghai’s stock index lost 7 per cent yesterday, a reversal which will shock a new generation of millions of investors who have never seen a market fall. It is this shock that has rattled the government because of the possible effects on social stability.
“Two of the three stocks I hold fell sharply today… 5,000 yuan (£354) disappeared in a few days. I just want to cry. I want to tell everybody I know: keep away from the stock market,” said one new investor, Dai Yu.
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