As the Eurozone talks and negotiations partly resume
between Greece and the European Union, China's economy fails to ignite after
its months-long slump. According to analysts, China is heading for a 1929 stock
market crash. The worst part, they say, is that investors glue their sights on
Greece and not in an area that could serve as a global sinkhole.
According to analysts, before the Greek crisis, every
summer, a 30% fall in the Chinese stock market becomes big news for all
investors. This includes government actions to stem investor panic. But with
the Greek crisis taking the limelight, China's economy may fall, along with its
banks.
China is showing symptoms of the 1929 Great Depression
where the United States was enjoying a decade of frantic growth, extraordinary
wealth and excess. To blame was extremely rapid credit growth, according to
analysts. China's credit boom even surpasses the capability the "roaring
20s" had.
However, China's own roaring decade only lasts a year.
The Shanghai composite had lowered by nearly 30% upon
opening on Wednesday. Many companies have suspended their stocks from trading
to contain the situation. Analysts also see that investors are not willing to
gamble with the Chinese government's capability to manage assets effectively.
China's ineffective method of creating one bubble
after another will not prosper for its stock market, according to analysts.
