Mr. Shangkong | Few want to explain disconnect between bull run and real economy
Nation's economy is in worst shape in more than a decade, yet our stock market suddenly shot up
In times past, whenever jobs available on the farm were sparse, Chinese farmers waiting for employment by the farm owner would be gathered at the centre of the village, playing cards and gambling to kill time.
A joke spread widely on Chinese social media networks last week suggested similarities between today's stock market investors and those gambling farmers. When our national economy is in its worst shape in more than a decade and many corporates have run into trouble, our stock market suddenly shot up to make everybody happy.
What happened to both the Hong Kong and mainland Chinese stock markets last week caught worldwide attention. The bulls can always find reasons to defend why the market was up, but I rarely heard anyone explaining the disconnect between the weak real economy and the so-called bull run.
Even the state media probably got over-excited. One Chinese newspaper commentary tried to name the surprising market performance as the latest achievement of President Xi Jinping because the top leadership in the country wanted to "create a new opportunity for wealth redistribution for everyone" to narrow the income gap. Redistribute wealth through the stock market in a socialist country like China? Sounds an exciting new economic theory.
To focus on your real job should be the thing you really care about
The Shanghai-Hong Kong - and upcoming Shenzhen-Hong Kong - stock through train to give investors in those markets access to each side is widely said to be the main reason the Hang Seng Index got pushed up. Many analysts would explain that mainland Chinese capital was rushing to Hong Kong-listed mainland Chinese companies due to relatively cheaper valuations.