Strong market performance shows WSJ report distorted facts: experts
Chinese stock markets have rallied for three consecutive days amid the country’s fight against the 2019 novel coronavirus, which experts said has clearly refuted malicious and unfounded attacks on China’s economic and financial sectors by some Western scholars and media.
The Wall Street Journal (WSJ) recently published an article titled “China is the Real Sick Man of Asia.” The article, written by US scholar Walter Russell Mead, is full of aggressive, slanderous sentiment.
For example, it claimed the coronavirus epidemic in China has the country’s financial markets “shuddering,” saying a “massive financial collapse” is likely following the epidemic. It also noted that China’s financial markets are “probably more dangerous in the long run than China’s wildlife markets.”
Chinese financial experts refuted the WSJ article as a “severe distortion of facts.”
“That article is certainly not describing China’s financial markets in an honest way,” said Zhao Xijun, a vice president of the School of Finance under the Renmin University of China.
Chinese stock markets have rallied for three consecutive days following a sharp decline on Monday, the first trading day after the Spring Festival holiday.
The ChiNext board, also known as China’s Nasdaq, has managed to hit new highs after a three-day rally. On Thursday, it rose by 3.74 percent to 2,012.25 points. The board stood at 1,927.74 points on the last trading day before the Lunar New Year holidays.
The two bourses in Shanghai and Shenzhen have also skyrocketed in recent days despite news of the disease. On Thursday, the Shanghai market was up 1.72 percent while the Shenzhen market climbed 2.87 percent.
Most commodity futures, including crude oil, glass and eggs also secured rises above 2 percent on Thursday.
“The market mood has been quickly shifting from panic to confidence as investors employ more rational judgment about the impact of the epidemic after observing China’s timely and painstaking response,” said Zhao.
Experts also clarified that a virus-triggered “financial collapse” is only prejudicial conjecture from certain Western media.
“How can China’s stock markets collapse with much lower valuations compared with US’ shares and rapid corporate growth?” asked financial observer Zhao Qingming.
He said the epidemic would bring about losses for some domestic companies, but they represent a limited portion of the country’s general economy.
“The temporary development of the epidemic has not changed China’s general economic trend. And judging by the solid rebound, market investors have realized that,” he said.
Zhao Qingming also anticipated that the government is likely to kick start a new round of investment in public construction after the epidemic, which would help the economy recover.
The experts also clarified that though China’s financial sectors did present some problems in the past, most have already been resolved under tough top-down management.
The WSJ article cited several of China’s financial risks including accumulated lending costs, property bubble and vast industrial overcapacity.
“The mentioned problems are now well within the safety line,” said Zhao Qingming.
China eliminated about 110 million tons of excessive coal capacity in 2019, according to media reports.
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