While few investors in the Chinese mainland are resting comfortably on their dividends returns, most enter the market with the expectation that buying low and selling high is the only way they can realize a decent profit. Of course, the length of time that investors' retain their shares is based on their confidence in the future performance of the company in which they are taking a position. But after a long series of scandals wiped away the value of numerous listed firms, it is natural that few investors in China are willing to accept the risk of holding their positions for long periods of time. In fact, most investors only buy shares in sectors that they expect will benefit from favorable government policy support.
Similarly, although China's blue-chips are generally undervalued based on their price-earnings ratios, the market's gaping loopholes make it hard to distinguish businesses with true potential from the scores of overheated and poorly managed firms that crowd mainland boards.
Unless China's securities regulators can set the country's unruly, scandal-prone equity market to rights, investors will continue to seek out short-term positions; and tax policies like the ones recently introduced by the government will be viewed as little more than symbolic gestures.
Landmark building should respect the public's feeling
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