China's stock market is showing a new face in the new year. The Shenzhen Exchange has continuously climbed more than 2 percent in the past two days, while Shanghai rose 3 percent both Monday and Tuesday.
The stock market had dropped continuously last year. But the first two trading days of 2009 have witnessed a surge of about 6 percent in the Shanghai Exchange and 4 percent in the Shenzhen Exchange. A professor in Beijing gave his analysis.
Zhong Wei, Professor of Beijing Normal University said "The capital market could possibly come back in the new year. The US and Japan may take the lead to tide over the recession by the end of this year, while their consumers' confidence may come back. China's macro economic confidence will also renew then. The bubbles in the capital market is basically skimmed, this is also a factor for the market to turn over in 2009. However it's not realistic to expect a big surge in the market this year."
The overall economic environment is discouraging, but experts believe that three elements will contribute to a U turn reversal in the A share. These are: the government's macro control policies will show effect no late than the latter half of this year; the drop of economic status in major crisis-hit areas is slowing down; also A share is about to come back according to market rule after a deep adjustment.
Experts also say the market value is more reasonable now, so it's a better chance for investors to have a try compared with last year, especially for short-term investment.
(CCTV January 9, 2009)
