Mainland Chinese who fancy a flutter but not a trip to Macau have an easy alternative: China’s stock markets, which for years have been compared to casinos, where bets on stocks are based on sentiment and rumour, rather than economic fundamentals.
Such behaviour has caused wild fluctuations over the years as bubbles form and burst, punctuated occasionally by government intervention – usually featuring misguided policies and ill-considered rescue plans to the tune of trillions of yuan of taxpayers’ money.
Last year, the central government reportedly injected nearly 2 trillion yuan (HK$2.32 trillion) in a desperate bid to prop up the markets, but failed. The spectacular crash that ensued spooked international markets and heightened fears over the health of the Chinese economy.
Since the crash mainlanders have turned to what they believe is a safer bet – the property markets. They have done so on the assumption, right or wrong, that the mainland leadership wouldn’t dare allow property prices to crash because a precipitous fall could send the whole economy down the drain.
