Small shareholders in China fret over tumbling economy

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The Shanghai Composite Index has dropped by 40% in the past five months, with a massive 4% tumble occuring on Tuesday (March 19). The Chinese government promised its people immunity from the worldwide financial slump that grew out of the US subprime crisis, but the stark evidence suggests it has failed. Small shareholders fear the worst, and are expressing their worries online- including in songs.

Hitting an eight month low the Chinese stock market is valued at a third of what it was at its peak in October last year. But central bank governor Zhou Xiaochuan yesterday dismissed the warning signs as "rumours". He shrugged off concern about the possible effects of the US subprime crisis. "America is far away," he pointed out, before telling the Chinese parliament "it's better not to talk about [these issues] here".

Contributors

Small shareholder "Mr Zhang"'s song

I follow the stock market from 9.30 in the morning till three in the afternoon.

I'm very busy from Monday to Friday... I never exercise Falun gong [banned Chinese movement] or commit any crime.

I pay my taxes and support the communist party.

How does it feel to swim in the stock market?

Let me tell you slowly.

It's not easy to earn money, it's easy to get stuck, and my money is stuck in stocks and shares every day...

Where's the money? It's beside me but I can't touch it or see it.

When the autumn wind blew the market's strength fluttered away.

The stock market suddenly dropped like a waterfall,

My heart was beating so fast as it crashed down......

And how can we punish the fraudulent shareholders?

The illegal dealers are caught, but I don't see the operation leaders getting punished...

Information is most important but I can't get any.

Statements are all filled with promises...

There is no heaven or hell,

This is not a bank or a casino,

This is our developing stock market.

I'm not a man with grand designs,

But I can help the country to develop its economy.

I have a dream and a strong will.

I'm Mr Zhang among sixteen million shareholders.

And I've got the cheapest shares."

"The Olympic Games won’t offer a complete turnaround"

Comment from Beijing economist Han Zhiguo, posted on sina.com March 12:

The Chinese stock market is going through a mighty storm this year. After two months of advance and decline it looks dangerously placed at the top of a slippery slope. And when conditions are good, the market doesn't respond quickly enough and the moment is lost. The only ones to profit are those who manage to sell their shares in time for it to dip again. Investment laws have been abandoned. You can only go by guessing.

In early January when the situation around the world got even worse, I called for the government and economists to save the market from imminent danger. But they couldn't make a decision. They hesitated too long, and finally, they missed the right moment. It was too late to save the market; we would just have to suffer bear market conditions until the economic illness had run its course. But wait, surely we would be saved- the Olympic Games were on their way!

Sadly...that will not be the case. Let me remind you that the basic supply and demand structure of the market has changed. Regulation has come off the rails and certainty discarded. Even with the games on their way, they won't offer a complete turnaround; only a huge rush. After being constrained for half a year you can't expect the economy to suddenly advance unhindered. Dividends have been starved for six months long, and these are essential for redevelopment. Just changing market rules won't complete the process. The stock market has gone through a high risk zone, and the government needs to make shares attractive again to save it. Otherwise, when the games are over and funding diminishes, the market will go back into retreat and we'll be staring into an abyss."