China Reverses Course On Whether It Wants Stocks To Be Up Or Down

Remember last year, when Chinese officials were worried about their overheating market? Apparently they've decided that overcooling is now the biggest danger. The Shanghai market has soared on news that the government there has reduced a per-transaction tax on trading stock. Cutting taxes on stock trading is probably a smart idea, but blatantly basing policy on whether you want stocks to be up or down, sounds like a recipe for disaster (note: US regulators might want to consider that same lesson).

Comments

[daddysteve]

This seems like it will help brokers regardless of whether the market goes up or down. I guess less taxes would help the market in general.

[daddysteve]

This seems like it will help brokers regardless of whether the market goes up or down. I guess less taxes would help the market in general.

[daddysteve]

This seems like it will help brokers regardless of whether the market goes up or down. I guess less taxes would help the market in general.

[Mark]

Taxes lower is good if credible and permanent, but the problem though is that they would just as easily increase taxes one day in the future if it was deemed investors were making too much money.

Its classic old-line communist control thinking, and actually though they feel they are now supporting the market, they are still effectively talking it down in the long term since the market's credibility is just getting shot with each manipulative action. My bet- it will only get worse. Wait til more people start questioning the accounting statements of many state owned enterprises recently listed.

The chinese markets (Both Shanghai & Hong Kong) are much more immature than they are treated, more so than many other developing countries which get less respect.

I think we'e getting a nice realization these days that despite all the talk of opening up, China is still one of the more authoritarian, secretive places in the world and tthis is plainly not good for markets long term.