Hong Kong Press:Economists warn China stock markets could crash

3/8/2001 9:15:00 PM Mar 08, 2001 (FWN Financial via COMTEX) -- Beijing, March 9 (BridgeNews) - Three mainland Chinese economists sent an open letter to delegates of the National People's Congress (NPC), currently in session, warning that China's stock markets are headed for a crash similar to the one that hit the U.S. in 1929 and Japan in the 1990s, the South China Morning Post reported Friday.

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"China's stock markets are heading for a crash similar to that in the U.S. in 1929 which caused the Great Depression and that in Japan in the 1990s," the letter said.

The authors of the letter were Yang Fan and Zuo Dapei of the Economic Research Institute at the China Academy of Social Science, and Han Deqiang of the Economic Management College of the Beijing Aeronautical University.

The authors of the letter said prices on the markets are often artificially high.

"Over the last 10 years, China's stock markets have not played the role they should have. A huge amount of capital is not going into investment but into the stock market, pushing up prices artificially high. While industry shrinks, the markets have become a black hole sucking in capital."

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-- Carl Jenkins (somewherepress@aol.com), March 09, 2001