China’s latest stock market, STAR, made its debut and created an opportunity for a bunch of companies and their institutional investors to offload a vast amount of stock into the hands of Chinese retail investors. What happens to the prices from now on, who knows. But if the past performance is any indication, many of those retail investors are holding stocks with questionable value. If the market remains as volatile as it has been in its first week, then the authorities may have to step into control it, which would be a setback for those hoping for a loosening and liberalization of the financial system.
The other hot topic – US-China trade talks – moved sort of sideways this week. A meeting is coming up in Shanghai next week, but the vibes from the twin capitals suggest there is little chance of a breakthrough.
The real focus for China watchers now is the seaside resort of Beidaihe where Those in Command will not be sunning themselves. But there is definitely a lull in news, which after such a frothy year to date is something of a relief. We will enjoy it while we can.
Have a good weekend.
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