You know how more and more people are calling the Chinese stock market a bubble and even a Ponzi scheme?
Well, Chinese officials are thinking the same thing. They just don’t know what to do about it:
Bloomberg: Chinese officials said they will scrutinize gains in stock prices without capping new lending after a record $1.1 trillion of loans in the first half added to credit risks and threatened to cause asset bubbles.
The government wants stock-market stability and is studying gains, Vice Finance Minister Ding Xuedong said at a press briefing in Beijing today. The People’s Bank of China has a range of tools to cap money supply, Su Ning, a deputy governor of the central bank, told the briefing.
Since a government “investigation” can’t possibly yield much, and since they’re saying flat-out that lending won’t be capped, this sounds incredibly bullish. China isn’t going to take away the punchbown — as we’ve noted, they just can’t. When even the slightest hint of lending curbs recently brought up, the market tanked nearly 7%. Imagine if the threats were real. The bubble must roll on.
Meanwhile, we see stories like this.
MarketWatch: Chinese e-commerce firm Alibaba Group has teamed with China Construction Bank Corp. to offer an unsecured loan service for small and mid-sized companies in China’s Zhejiang province and Shanghai, according to a report Friday.
The Nikkei business daily reported that Alibaba’s loan program will be available to Alibaba members, while China Construction Bank will conduct related credit checks.
Everybody wants to get into the Chinese lending game!
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