China share fall and economic prospects

China has had unprecedented economic growth in its history. It has become a major economic rival on the world scale. Its economic expansion in the West as well as in Africa allows it to have assets. Its economic success isn’t without difficulties. It is likely to have a great impact on the environment. The majority of its population are unlikely to benefit from China economic boom in the foreseeable future.

China markets have entered the world of liberalisation and speculation. With them markets become unpredictable as they can go out of control. Buying shares in the hope of big returns is one of the biggest risks as a plunge of their values spread like a fire. The current “crush” in shares should be seen just as minor stroke as Chinese economy can recover through its huge investment. The danger is when it slumps through excessive speculation and unfavourable international trade. International economy has become intertwined with the Chinese on many levels.

The Chinese can’t afford to regress to the Mao era when all the economy was in the hand of the state. Chinese government still needs to create more enterprises to allow people to benefit from them. They can’t depend on healthy return from shares while lazily drowsing on their sofa. It’s just an equivalent to the fully communist era when the Chinese depended on the state to do everything for them without having the freedom for personal initiative and the right to pursue personal prosperity through one’s hard work.

At 05:22 PM on 30 May 2007

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