Let them own cars, not stocks

A boom in car sales in China is one reason why the new middle class are buying less stocks.

Since their creation, Chinese stock markets have generally gone up, partly on the back of a government-sanctioned bull run, and partly because there weren't many alternatives for the mostly retail investors to spend their money on.

But the stock markets have been drifting downward for the past two years, despite an increasingly optimistic overall growth story. The Shanghai A-share index, for example, was at 2341 points in June 2001, it's high point for the past 24 months, compared to barely over 1300 at the beginning of this month, its low point for the same period.

All the macro indicators look strong, meaning the market's secular downward trend is not likely to...

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