Cheng: Market bubble still there
14 March 2007
Warning against "blind optimism", NPC vice-chairman Cheng
Siwei said Tuesday there is still a bubble in China's stock markets. A warning from
Cheng helped spark last month's correction. "The bubble has become a bit
smaller, but we cannot say there no such thing at the moment," he told the
South China Morning Post on the sidelines of the annual NPC session. Cheng is a
leading economist who has spoken out before on financial issues but has no real
authority over financial matters. Cheng said investors should understand that stock
prices can fall, there are always winners and losers, and shares should rise
and fall based on company performance. The recent bull run that saw indices
jump 130% last year was supported by a rise in the value of a few blue chips,
he said.