Burst it in July
May 30th 2007 12:37
It was a teaser that the increase in stamping duties reversed the Chinese stock market today, an attempt by the Chinese government to dampen the speculative frenzy. It is a sign of what to expect further but the new measure would not likely to cause an adverse effect on the market.
The real game could begin in July when the Chinese government would push the button and roll out the real deal in controlling the bubble.
Why July?
Firstly, May is giving way to June, the month of the June 4th Incident, a very sensitive time for the Chinese authorities and the last thing the government wants is a bubble-induced unrest by the hordes of speculators during such a sensitive period.
Secondly, China and Hong Kong will be celebrating the 10th Anniversary of the Transfer of Hong Kong back to motherland on 1st July, and again the Chinese government will not want any sour mood to spoil the celebration. This is an occasion to for the Chinese and Hong Kong government to highlight the success of the transfer and not be marred by the bubble burst.
Until then, the momentum of the bubble will be maintained to avoid any disruptions during the period of such significance to the Chinese people and authorities. Like 1997, right after 1st July, the market will be in for some real corrections, only this time it will be induced by the Chinese government .
They will have to do it before the Beijing Olympics next year and right after 1st July this year is the perfect time to do the tinkering.
2nd July, 2007, mark that spot on your calendar.
---
Related Post:
The China Series
Bracing for July 2007: A downturn?
The real game could begin in July when the Chinese government would push the button and roll out the real deal in controlling the bubble.
Why July?
Firstly, May is giving way to June, the month of the June 4th Incident, a very sensitive time for the Chinese authorities and the last thing the government wants is a bubble-induced unrest by the hordes of speculators during such a sensitive period.
Secondly, China and Hong Kong will be celebrating the 10th Anniversary of the Transfer of Hong Kong back to motherland on 1st July, and again the Chinese government will not want any sour mood to spoil the celebration. This is an occasion to for the Chinese and Hong Kong government to highlight the success of the transfer and not be marred by the bubble burst.
Until then, the momentum of the bubble will be maintained to avoid any disruptions during the period of such significance to the Chinese people and authorities. Like 1997, right after 1st July, the market will be in for some real corrections, only this time it will be induced by the Chinese government .
They will have to do it before the Beijing Olympics next year and right after 1st July this year is the perfect time to do the tinkering.
2nd July, 2007, mark that spot on your calendar.
---
Related Post:
The China Series
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