Wen Jiabao Distressed About China's Out-of-Control Stock Market
During one State Council's Standing Committee meetings, Chinese Primer Wen Jiabao remarked, “The security and stock markets are continuing to grow. Since last November, there have been five warnings. Since then several measures have been put into place to cool down the situation. This converse phenomenon is an artificial manipulation of the stock market. Facing a situation like this, my heart is always very tense and I am constantly perspiring. Once this financial crisis happens, the stock market will be the first to suffer. In fact, a bubble stock market has already come to the surface and formed. It is a time-bomb waiting to detonate.”
On April 18, Wen Jiabao presided over a State Council Standing Committee meeting. When he was analyzing the economic situation of the first quarter, he said, “The alarm bell has be to be sounded all the time and people's mind needs be clear. The outstanding contradictions and problems are still very severe in the current economic situation. It is beyond the point of a simple warning, at some point so we must strengthen our sense of hardship and crisis.”
'I Certainly Should Assume Responsibility'
Wen admitted, “I should certainly assume the responsibility along with the State Council. However, once the stock market goes into a slump and leads towards collapse, it will be a nationwide political, economic and social disaster. Who can afford it? The State Council also can't afford it, this is karmic retribution!”
Investors Have Exceeded 100 Million
The latest data indicates investors exceeded 100 million people at the end of March, reaching a number of over 103,700,000 people. Professional stock brokers account for more than 13.3 million people. The average city stock price has reached 50 times the market value. Some even reached 250 times the market value which is nearly 12 trillion yuan (US$1.5 trillion). Nearly 1.3 trillion yuan ($0.16 trillion) worth of properties have been mortgaged.
Wu Yi: The Market Has Gone Crazy!
On April 16, China's vice Premier Wu Yi commented on a report titled Securities Market Trends: “Is the stock market overheated? Are the investors expecting too much? Wu said, “Is there anyone creating a façade by manipulating the market?” She said during a meeting of the Banking and Securities Monitoring Committee: “There are nearly 100 million investors with a daily transaction of 200 billion yuan ($25 billion). The stock market has gone crazy!”
Vice Primer Wu Yi and Zeng Peiyan, State Councilor Hua Jianmin, Vice Chairman of State Council Cheng Siwei and others have all tried to cool down the stock market in Beijing, Shanghai, Shenzhen, Hong Kong and other places but there is only little significance.
Who is controlling the stock market?
Wen's “anxiety” and “cold sweat” is real. If the Central Committee announces that the stock market has become a bubble market or it is over-purchased, the consequences will be too severe; if the Central Committee allows the stock market to continue to rise, it will inevitable results in a disaster.
Beijing's political and economic circles are all asking: Which force can contend with the Central Committee's macro-control? Which force can manipulate the stock market and make it continue to heap up while the Central Committee is trying to cool things down?
Obviously, this is a power struggle transferring from the political domains to the economic sphere. It is very obvious that stock markets are being manipulated to put Hu Jintao and Wen Jiabao in a passive situation.