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China Stocks

China Central Bank Raised the Rate

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You can read all this in JRJ.com if you know Chinese. My take on this is policy only works when market does not anticipate this. This time China Central Bank did give the investors (speculators) a surprise. But fundamentally, the growth of economy won’t slow down, and the company earning growth should continue for a while. Even in the short term, it may embolden the speculators because this removes another cloud (expect no interest hike for a while). People simply won’t move money from stock back to savings to get the 0.27% interest increase.

I think these two reasons also explains why the stock market is so hot in China?