China’s Stock Market Recently Became a Guaranteed Bond Market – IEMS’ Xi Li Speaks to RTHK TV (The Pulse) and Phoenix Finance Channel

Published on: 2015-07-09

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RTHK TV (The Pulse) discussed the recent turbulence in the Chinese stock market as well as the Chinese government’s intervention into the market. The program invited IEMS’ Li Xi and stock market commentator Francis Lun for the thoughts on the market swings. Prof. Li commented that the Chinese stock market is now at a critical period–similar to what the U.S. faced when deciding what to do with the now-defunct financial services firm Lehman Brothers–where the central government decides how it should intervene and address the issue. Prof. Li added that they should not have intervened in the market in the first place, as there is no liquidity for the large amount of existing high-risk capital in the market.

On Phoenix Finance Channel, Professor Li was quoted as saying that the recent plunge on Hong Kong and A-share markets would continue. He said the intervention of the stock market by the central government goes against market principles, and essentially turns the stock market into a “guaranteed bond market”. He reminded the audience of the current risks in the market, which would not only affect future growth of the region, but also the pace of recovery in the US.

Watch the interview on RTHK TV (The Pulse): The Pulse (Chinese with English subtitles)
Read the Phoenix Financial Channel article: On Phoenix Financial (Chinese only)

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