A Shanghai businesswoman named Fan Yun has criticised China’s market regulators for igniting a stock crisis during comments made earlier today at the National People’s Congress (NPC).
In what is a rare rebuke for the Chinese authorities, a spirited Fan said “The ten years of stock market development since 2007 is a decade of tears for Chinese investors.”
According to Reuters, the delegate laid into Chinese brokerages for failing to educate investors and blamed regulators for failing to properly control the margin lending and alternative credit channels that helped inflate a stock market bubble.
Economists had pointed out as early as last summer that the unprecedented rise in the stock market was divorced from the fundamentals of profit and growth, with a large number of domestic investors having not completed high school.
Then in January, Xiao Gang, the former chief of the China Securities Regulatory Commission, tendered his resignation after taking the blame for the poorly implemented circuit breakers which put the market in turmoil at the beginning of the year.
While refreshing to see someone stick it to the authorities, Fan’s comments might be exaggerating the situation somewhat. While Chinese stocks may have been miserable places for investors to park their money, only a small proportion of households in the country are directly exposed to fluctuations in the market.
Back in July, Quartz estimated the number of Chinese exposed at approximately 14 percent of the total population. A report by the European Parliament on last summer’s meltdown also provided a similar figure and contrasted it with the 55 percent of US citizens who have savings tied up in stocks.