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English>>China Business

Capital market needs clearing up

By Hong Liang  (China Daily)

08:13, August 28, 2012

The prolonged stock market slump is taking its toll on the mood and aspirations of many young professionals in an industry that once seemed gilded in gold.

For the first time in their relatively short careers, a host of young stock analysts and traders, mostly in their late 20s and early 30s, have had a taste of hard times, as some have been laid off by their firms and others have seen their salaries slashed.

Covering the plight of these former hotshots in the mainland's stockbrokerage community, a reporter at our Shanghai bureau told me that everyone she talked to was unbearably gloomy. The reporter also told me that her husband, who works at a Shanghai-based commercial bank, was so shocked by the cut in his salary that he voluntarily gave up eating fresh fish, his favorite dish, at every dinner. And at the insistence of the husband, the young couple has gone into austerity mode, skimping on everything except books and CDs.

This belt-tightening has spread to other parts of the financial industry as well. But it is important to note that the so-called bloodbath is not without benefits to the longer-term development of the mainland's capital market.

Something similar happened, albeit on a more extreme scale, in the Hong Kong Special Administrative Region after the outbreak of the Asian financial crisis in 1997, which swept through the capital market like a tropical typhoon. The pain brought about by the massive destruction of asset values helped clear the deck for the emergence of a better-regulated and less-cluttered stage on which stronger and more professional players could show off their talents unhindered by entrenched interests that were stale and corrupt.

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