The paradox of China's stock market (3)

WHAT'S BEHIND THE MARKET RETREAT?

China's stocks are not just "a bear market," said Hua Sheng, a well-known Chinese economist, noting that the problems lie mainly in an apparent imbalance between supply and demand as well as in the basic market system.

In regards to the recent tumble, other analysts have also cited a weak outlook for corporate earnings and an expected seasonal cash crunch toward the year's end.

It seems strange that a number of enterprises are lining up to enter the Chinese stock market despite its bearish performance and many investors waiting for their chance to cash out, said Hua, the economist.

Investors have been jittery about a growing number of companies waiting to get a greenlight to list, which would further strain market liquidity.

According to data from the China Securities Regulatory Commission (CSRC), a total of 808 companies were applying to launch initial public offerings (IPOs) as of Nov. 22 this year, with a gross fundraising volume of more than 500 billion yuan (about 80 billion U.S. dollars).

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