Excessive reliance on capital markets is bad for China's economy

Countries are not companies. What''s good for a company is not necessarily good for a country.

A pattern is emerging in China - using the stock markets, both domestic and international, to suck up the cash to pay for modernization. We have seen it in the oil and telecom industries and we are just about to see in the power industry.

What sticks out with all these moves is that they reveal a conflict between what is good for shareholders and what is good for the structural improvements of China's economy and its consumers.

China's focus...

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