China’s confidence game: How investors are paying the price for believing


Financial Post

For a communist country, China has done a lot of things right economically. Over the past three decades, it has liberalized the domestic economy and opened up the borders for trade, helping to lift hundreds of millions of citizens out of poverty (per capita GDP has more than tripled since 1980) and creating a global powerhouse.

[np_storybar title=”China’s stock market: After quick 8.5% crash, confusion reigns” link=”http://business.financialpost.com/investing/global-investor/chinas-stock-market-after-quick-8-5-crash-confusion-reigns”]

It’s days like Monday that reassure Tony Hann he was right to avoid stocks in mainland China. The severity of an 8.5 per cent drop in the Shanghai Composite Index is bad enough, but what irks him the most is not knowing why it tumbled so much

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[/np_storybar]

But this transformation has not always gone smoothly, to say the least. And it may well get a lot rougher if what’s happening in China’s stock markets lately is any indication.

China’s two…

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