Posted by: Bruce Einhorn on September 2, 2009
The Shanghai stock market took a beating in August, tumbling 25%, amid investor worries the Chinese government is readying to cut back on lending by the state-owned banks. Yesterday Chinese Premier Wen Jiabao seemed to give assurances that there’s no reason to be concerned Beijing will be taking away the punch bowl from China’s easy-money party. According to this story from the official Xinhua news agency, “China would not change the orientation of its stimulating economic policy” and “would continue to pursue proactive fiscal and moderately easy monetary policies.” The agency went on to quote Wen directly saying “we will not change the orientation of our policy.” Will this reassure jittery investors in China? No doubt they’re still suspicious. Still, while markets in the rest of Asia are down today, following a bad day for the Dow, Nasdaq and S&P 500, Shanghai was up 0.5% in morning trading.