The two sides of the China story

This week's Investment Week Articulate page points out that although China is experiencing an economic boom, the stock market suffers from value destruction and declining return on equity. If there is a subject you'd like to see explored on this page, please email: [email protected]

If ever there was a country which best demonstrated the chasm that can exist between the direction of an economy and its stock market, it's China. Official headline figures project an economy charging ahead with tremendous stealth. The state of its equity market, however, could not be any less magnificent. Arguably, Chinese companies have a history of value destruction, and investors would have lost over 75% of their money if they had invested in China over the past 10 years. Cheap labour, for so long the main attraction, is fast losing its competitive edge, and despite rising revenues, m...