SHANGHAI B shares fell for a second day amid signs that investors were growing increasingly wary about the risks of investing in China. 'People are very scared about the risks of this market and the fact that it is hard to get out of,' said Tina So, a China fund manager at Schroders Asia. The Credit Lyonnais Shanghai B Index fell 8.78 points, or one per cent, to 831.77 points on trading worth US$5.24 million, down from $5.38 million on Friday. Traders said US institutional investors were starting to reassess the risks of investing in China due to concerns about accelerating inflation. 'They take the view that the risks of investing in Chinese equities are very high and the share prices too expensive,' said Lawrence Ang, head of China research at SBCI Finance Asia. The Shanghai B-share market is trading at an average price-earnings multiple of 14.3 times, far higher than the issue price of recent share listings. Trading volume in Shanghai has all but dried up, making it difficult for investors to conduct sizeable transactions. Traders said a large sell order could take several weeks to complete unless the seller was prepared to lower the offer price. Some US investors were concerned about the high inflation rate and the possibility that the Chinese Government would be forced to impose tougher austerity measures early next year to bring it down, Ms So said. Taxi operator Dazhong Taxi fell 5.9 per cent to $1.06 on news that the company is planning a rights issue. Shares worth just $10,000 were traded. The company plans to offer B shareholders the right to buy three shares for every 10 they hold. A shareholders will be able to buy 19 shares for every 10 they own. Rights issues are unpopular with investors since they involve share dilution. The day's most active stock was Shanghai Industrial Sewing Machine, which fell 1.5 per cent to 51.6 cents on trading worth $1.56 million. China's textile machinery industry has been plagued by debt problems this year with many customers unable to pay for machines due to a nationwide credit squeeze.