Fear not

It’s back to the grind after China’s week-long National Day holiday and the government has a message for its people and investors: Please don’t freak out. The central bank welcomed the passage of the US$700 billion financial bailout (“rescue package” if you’re Republican) and insisted that “China’s financial system is sound and safe.” Wen Jiabao threw in his two cents by saying that the economy was “moving in the direction we expected.” Retail sales over the holiday seemed to confirm this, posting a 21% year-on-year rise to US$61 billion. (Shameless self-promotion alert!) For more about China’s retail boom, check out our October cover story. Nonetheless, while other markets are seeking to decrease financial tools like short selling that some have blamed for exacerbating the credit crisis, the China Securities Regulatory Commission announced a new margin lending and short selling trial program to ensure greater market stability. The next item on the “fear-not menu” involves China’s product safety scandal du jour, tainted milk. The General Administration of Quality Supervision, Inspection and Quarantine released a new survey of dairy products in which they tested 600 batches of liquid milk from 27 cities. The result? Drink up. All samples were reported free of the chemical melamine, which has led to four deaths and sickened 53,000 dairy imbibers. In addition, 5,000 quality inspectors have been dispatched to dairy factories across the nation where they will work around the clock to make sure milk products are safe. Be un-afraid. Be very un-afraid.