China’s Market Value Overtakes Japan as World’s No. 2

[Joanne98]

Source: Bloomberg

July 16 (Bloomberg) -- China overtook Japan as the world’s second-largest stock market by value for the first time in 18 months, after government stimulus spending and record bank lending boosted share prices this year.

The Shanghai Composite Index rose 1.4 percent yesterday, sending the value of China’s domestic stock market to $3.21 trillion, compared with Japan’s $3.20 trillion, according to data compiled by Bloomberg. The Shanghai index has gained 75 percent this year, the best-performing major market, against a 7 percent advance in the Nikkei 225 Stock Average. The U.S. has the biggest equities market worth $10.8 trillion.

“China is just entering its stride and is still very much in a growth phase, while Japan is already a developed economy,” said Daphne Roth, Singapore-based head of Asian equity research at ABN Amro Private Banking, which oversees about $14 billion.

China last surpassed Japan in stock-market capitalization from Jan. 4 to Jan. 24, 2008, data compiled by Bloomberg show. The Shanghai Composite tripled in the two years leading to its record on Oct. 16, 2007, before tumbling 72 percent to its trough the following November.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a_84o9PPPGqk

[fencesitter]

1. Economy in China Regains Robust Pace of Growth

Source: NYT

Fueled by an ambitious stimulus program, China’s economy grew by a surprisingly strong 7.9 percent.

SHANGHAI — Fueled by an ambitious economic stimulus program and aggressive bank lending, China’s economy grew by 7.9 percent in the second quarter of this year, the government said Thursday, a surprisingly strong showing given the world economic crisis.

The gross domestic product figures, released Thursday morning in Beijing by the National Statistics Bureau, are also surprising given how China’s exports have declined sharply after years of torrid growth.

Late last year, Beijing set a target growth rate of about 8 percent in 2009, though many analysts doubted it was possible, and the country seems to be accelerating toward that pace, particularly in the past few months. That level of growth was seen by many analysts and policy makers as vital to helping maintain social stability in the country.

The robust growth in China’s economy came as the United States and several other leading economies remain mired in recession, hobbled by the aftereffects of bad lending, weak real estate markets, and the uneven results of economic stimulus packages.



Read more: http://www.nytimes.com/2009/07/17/business/global/17gdp.html?_r=1&hp

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Proof that government stimulus plans do not work.

[Odin2005]

2. "Agressive Bank Lending" Where have we heard THAT before?

Oh yeah, that's what caused the frigging crisis in the first place! :scary:

[AlecBGreen]

4. apples and oranges

In the US, the problem stems in part from our banks lending money to people to buy homes who had sub-par credit or wanted a house that was outside their means. When a layoff came or the ARM reset, they were in deep trouble.

In China, the banks dont do mortgages. State-owned banks make loans to state and private companies for expansion & operating costs. China has a huge glut of workers, so this new lending by the banks (under orders from Beijing) will lead to more construction & infrastructure projects. This is a direct injection of money into peoples pockets. ITS NOT like the corporate giveaway stimulus we passed.

[Vidar]

5. Thanks for the clarification.

[Odin2005]

7. Probably right, but it still bothers me.

Maybe I'm just paranoid about "easy credit" no matter what it's purpose. :shurg:

[madrchsod]

3. no foreign products -no products made in china by foreign companies

the usa allows foreign made products to be used in the various stimulus packages....one of the several reasons why our stimulus package will not be very effective.

[Doremus]

6. How long before they knock us out of first. nt