China is intent on keeping its markets under control. In a couple of simultaneous events Thursday, Beijing underlined a ban on personal loans to buy stocks and state media aired an interview with a well known investor who said the market is approaching a bubble.
As expected, the markets went tumbling down. Shanghai slid, breaking a week-long bull run, while Shenzhen and Hong Kong also dropped. (By midday on Friday the Hang Seng Index was down more than 400 points, negating hard-earned gains throughout the week.)
Still, it will take more than a couple of announcements to break the fevered pitch. In Shanghai, people are lining up to buy shares, now confident in local markets following years of disappointment. In Hong Kong, as capitalist a city as there ever was, investors are as willing to dip a toe in as they always have been.
The pitch hit me in the face when I walked into a branch of the smallish Wing Lung bank in downtown Hong Kong. Few foreigners use their services, as evidenced by the literature in Chinese and lackluster customer service. What was unique was the open area in the back of the branch under a sign "securities services".
The square space was lined by five computers that displayed stock quotes. Groups or six or seven people crowded each machine, cheering stocks up or down much like one would cheer a horse at the track.
Judging by the state of the market at closing time on Thursday (the Hang Seng went up and down to close in negative territory), the cheering did little. But the ultimate reality of feverish investment is hard to ignore.