Despite Chinese SOE (state-owned enterprise) stocks surging due to the communist regime’s newly hyped system of “valuations with Chinese characteristics”—which has temporarily boosted Chinese investors’ confidence in such shares—the Shanghai Stock Exchange (SSE) Composite Index dropped below the psychologically important 3,200-point level this week.
Experts said that Beijing has fabricated the new valuation system to deceive Chinese investors, but that it can’t hide the downward trend of a weak Chinese market.
An Artificial Valuation System
Last November, China Securities Regulatory Commission Chairman Yi Huiman proposed a system with “Chinese characteristics” to evaluate Chinese companies. It was claimed the move would better estimate the value of SOE shares and more efficiently allocate resources.
Mary Hong
Author
Mary Hong is a former Epoch Times reporter based in Taiwan. She covered China news, U.S.–China relations, and human rights issues.
