 Anchor: Mainland stock markets experienced a big chill this winter as global stock markets plunged over worries of a U.S. recession. The Shanghai Composite Index dropped 7.2 percent in one day last week, the largest ever single-day point loss. Yesterday, the index plunged an additional 7.2 percent.
Has the Chinese stock market turned from bull to bear? Let's take a look at Media Spin today to see how reporters are assessing the plunge.
Reporter:
An article in Shanghai Securities News says the Hong Kong stock market is more closely related to the U.S. market because its currency is pegged with the U.S. dollar, and because foreign capital plays a strong role in its market. But the picture is different on the mainland, where the financial market is not yet fully open to foreign capital.
The article cautions against pessimism toward the mainland A-share market, saying the current plunge is mainly a result of panic-based offloading. China's continued economic growth cannot be reversed, so there's no reason to force ordinary Chinese investors to shoulder the consequences of the U.S. subprime mortgage crisis.
A commentary from Oriental Morning Post takes issue with the government's stance in the face of such a volatile stock market. To rebuild confidence, it says the government should stimulate the market by lowering the stamp tax on stock trading. An "invisible hand" is necessary to stabilize the stock market through policy leverage.
A commentator from Guangzhou Daily says the stock crisis has taught us two things: It's impractical to think the Chinese stock market is immune to earthquakes from the world markets. Also, globalization doesn't mean China can stop defending itself from external risks. While facilitating the free flow of goods and services, we should remember that globalization is a double-edged sword, and build up necessary firewalls against such risks.
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