At least 1 trillion yuan of gray funds forced into stock market

08:15, December 02, 2010      

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According to conservative estimates, more than 1 trillion yuan of incremental funds have entered the stock market during the 27 trading days between Oct. 11 and Nov. 16, said Yin Zhongli, financial expert at the Chinese Academy of Social Sciences.

Yin said that the annual increment of gray income, or hidden income, is proportionate with the fixed assets investment scale and GDP scale. As long as the hidden rules in China's business circle do not change, gray income will certainly increase with the growth of the fixed assets investment scale, reaching 5 trillion yuan in 2009, 6 trillion yuan in 2010, and more than 7 trillion yuan in 2011.

Yin believes that the increasing gray funds are being forced to flow into the stock market from the real estate market. There are two reasons why they are "forced." One is the restriction policy of real estate sales released on Sep. 29 and the other is the influence of inflation. Otherwise these funds may become bank deposits.

By People's Daily Online


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