The Chinese stock markets have gone overboard in the last two months by surging over 50% from the lows hit in March 2009. The massive stimulus spends by the Chinese government in the last few months coupled with over 50% extra lending by banks to the corporate sector and also to individuals, has lead to major recovery in domestic demand in China.
The stock markets reflected the improvement by gaining over 50% in the last two months. But they have corrected by over 15% in the last two weeks, only because the government is worried about the abnormal rise in bank credit, and is planning to reduce it in the near future.
Also with no recovery signs in Chinese exports, the foreign investors are said to be pulling back part of their investments from China in the last two weeks.
Chinese market crashes by 15% in two weeks
August - 18 - 2009 - Tuesday
