Why does China welcome short selling?

Why does China welcome short selling?
Oct 7, 2008 03:36
ZOEY Points: Join Date: Nov 29, 2004 Status: offline	I really can't understand why China allows the investors to sell short shares. As we know, UK, US and other developed countries have forbidden short selling just because of the US financial crisis. Strangely, China welcomes short selling and takes this as reform. What's wrong? Chinese market performs badly too. Originally, China authorities hope that its new reform could revive the market. However, the market doesn't seem to react positively. Yesterday, the Shanghai Composite Index closed at 2173 points, falling 5.23 percent. Actually, Chinese market has been performing badly this year. So far, it has lost 2/3 of its value. Now, the government introduces short-selling to the market. Will this destroy the $1,800bn domestic currency “A” share market?

Oct 7, 2008 03:36

ZOEY
Points:
Join Date: Nov 29, 2004
Status: offline

I really can't understand why China allows the investors to sell short shares. As we know, UK, US and other developed countries have forbidden short selling just because of the US financial crisis. Strangely, China welcomes short selling and takes this as reform. What's wrong? Chinese market performs badly too.

Originally, China authorities hope that its new reform could revive the market. However, the market doesn't seem to react positively. Yesterday, the Shanghai Composite Index closed at 2173 points, falling 5.23 percent.

Actually, Chinese market has been performing badly this year. So far, it has lost 2/3 of its value. Now, the government introduces short-selling to the market. Will this destroy the $1,800bn domestic currency “A” share market?

Oct 7, 2008 18:39	#1
MARRIE Points: Join Date: Jan 7, 2008 Status: Offline	Selling short, i think has been being played by trading houses in china. This time, it is legalized and articulated. Margin trading and Selling short usually for the rich who have collateral. this policy is an key step up to international level.

Oct 7, 2008 20:33	#2
JIMMYB Points: Join Date: Feb 7, 2007 Status: Offline	I am also worried about this. You see, Chinese market is not as free as other markets in the world. Those big investors are the key roles. As for selling short, they can benefit more. However, those small investors are not as lucky as those big ones.

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