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 on 'business' is not the same as a focusing on improving the economy. An efficient, well functioning market is good for everybody, including consumers. But business people, especially share investors are not always interested in...

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222