Will China Tank?

The Chinese stock market has been on a tear over the last 2 1/2 years. My question is: how long will it last?

The Chinese economy has been growing at over 10% for many years, so the fundamentals seem strong. But, has any market gone straight up without temporary setbacks along the way? Not that I know of.

Chinese investors have been piling into the market any way they can. Some are even borrowing against their homes to participate in the frenzy. Does that type of mania end well?

In addition, China is not fully a market economy, and it’s still run by a communist party which doesn’t fully recognize human rights, much less voting rights. And those government folks are trying like crazy to slow down the stock market now. Do you think they’ll just give up and join the party? Not likely.

Timing the market seems like a fools errand to me, but markets in that type of frenzy seldom end well. I’m neither long nor short Chinese stocks, but after the 10% drop in the Chinese stock market last February, I can’t help but wonder how the Chinese stock market may impact other world markets. I don’t know when, but at some point, we’ll find out.

Nothing in this blog should be considered investment, financial, tax, or legal advice. The opinions, estimates and projections contained herein are subject to change without notice. Information throughout this blog has been obtained from sources believed to be accurate and reliable, but such accuracy cannot be guaranteed.

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