Latest News:  
Beijing   Sunny    3 / -8   City Forecast

People's Daily Online>>China Business

Heavy flows of private capital create bubbles

By Xiong Jian (People's Daily)

09:45, February 10, 2012

Edited and translated by People's Daily Online

Unregulated exchanges that mushroomed across the country have seriously disrupted China’s economic order, and heavy flows of private capital into these exchanges has led to serious asset bubbles, said Hong Hao, a research fellow at the Institute of Securities and Futures under Central University of Finance and Economics.

“The Chinese government has recently launched a crackdown on unregulated exchanges, in an attempt to bring private capital back to the right path and enhance their positive role in promoting the development of real economy,” Hong said.

Local governments’ support is the main reason why exchanges have sprung up in recent years.

“An exchange cannot only attract large amounts of capital, but also benefit local warehousing and logistics industries if it develops well. Many local governments hold a stake in exchanges probably through state-owned investment companies,” said Hu Yuyue, director of the Institute of Securities and Futures under Beijing Technology and Business University.

Leading private capital back to right path, preventing excess market liquidity

Hong said that the Chinese government should introduce necessary policies and establish a funding pool to lead private capital back to the right path, and to prevent excess liquidity in the market.

Experts noted that capital markets mainly made up exchanges play a major role in resource allocation. Multi-level financial channels should be established based on capital markets, in order to boost the development of domestic companies.

Email|Print|Comments(Editor:张洪宇)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. President Hu meets with Canadian PM

  2. Hot Air Balloons festival

  3. Wind power capacity to 62.7 gigawatts

  4. Italian Mount Etna volcano erupts

Most Popular

Opinions

  1. China cannot stay out of Syrian chaos
  2. Practical guarantee for lasting peace
  3. Why China vetoes UN draft resolution for Syria issue
  4. Syria becomes focus of struggle among big powers
  5. Preventing UNSC from becoming a rubber stamp
  6. Drums of war beating again in Middle East
  7. American society at crossroads
  8. Values are thin excuses to start new wars
  9. Li Ning to lower costs, improve effeciency
  10. EU cannot act as sole toll bearer of the skies

What's happening in China

China's consumption of fossil fuels to decline

  1. Govt to slap fines on 2nd-child birth tourists
  2. Govt gets tough on food safety, quality
  3. Concern rises as cancer vaccines still on hold
  4. China vows to promote quality in development
  5. 55 rescued from snow-hit Tibet highway

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai