DiligenceChina

When I was getting my MBA in finance, I was impressed by terms like , “negative earnings growth” (i.e.: loss) and “right-sizing” (i.e.: mass lay-offs of middle managers to pay for senior management bonuses”. As an institutional equities broker, I always tried to put a positive spin on my company’s most misguided and irresponsible recommendations (“maintained a forward-looking focus”), but today I stand in awe of Zhou Zhengqing – member of the People’s Congress and one of the chief financial policy makers in the Mainland. The emphasis is mine – the admiration will be universal:

From today’s People’s Daily http://english.people.com.cn/200703/23/eng20070323_360428.html

China has no serious stock market bubble

‘The recent rise in stock prices is recoverable growth; market-oriented economic adjustments needed. From a sustained downturn to stable and healthy development, China’s capital market has reached a major turning point. Chinese people should cherish this hard-won situation and seize the opportunity to maintain the development of the stock market , said Zhou Zhengqing, a member of the NPC Standing Committee, vice chairman of the Financial and Economic Committee and former chairman of the China Securities Regulatory Commission, in a recent interview with the media. According to Zhou, there is no serious bubble in China’s stock market. ‘

Later, the article raises the bar for financial-market double-speak.

‘Slowing down excessive growth by introducing administrative changes is not advisable

On February 27 this year, a record was set on the Shanghai and Shenzhen Stock Index when the largest single-day decline in the market occurred, triggering a nationwide debate. Some people argued that there was a serious bubble in the capital market. In response to these claims, Zhou Zhengqing said: “This is a faulty conclusion based on a biased analysis of the stock market.” In his opinion, the slump on February 27 was simply an internal market rebound. ‘

A 400 point drop is an “internal market rebound”?! I LOVE this guy. I don’t know what’s going to happen if the A-Share market takes the serious hit that experts seem to think is coming, but I do know that I’m going to be looking for Mr. Zhou’s analysis of the situation. I don’t know if it’s going to a “setting the stage for new Socialist stock market victories” or “a demonstration of the collective will of the People to be cherished and admired” – but I am confident that it is going to be GREAT.