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Chinese Fear Impact of Finance Crisis

DW Staff (act) 10/10/08 (updated)October 8, 2008

The Asian stock markets virtually collapsed on Friday, with the leading Japanese Nikkei plunging by almost ten per cent -- the highest one-day loss in two decades. Hong Kong shares fell by more than 7 per cent, with the Hang Seng index falling below 15,000 points for the first time in three years. General worry about the global financial crisis is causing the havoc. In China, where the leading exchange in Shanghai lost 3.5 per cent on Friday, small-time investors are also beginning to panic, despite government reassurances.

https://p.dw.com/p/LsKk
Chinese stockbrokers worry about the falling share prices worldwide
Chinese stockbrokers worry about the falling share prices worldwideImage: AP

At a stockbrokers firm in Beijing, 50 computers are crammed into an open-plan office. The latest share values flash up on screens on the walls. A dozen traders are running about the room, shouting into their phones.

Chinese Prime Minister Wen Jiabao has tried to allay fears that China too will be badly affected by the global financial crisis by insisting that the Chinese market is secure and stable. But he has not convinced the whole population.

Mr Wu is one of the sceptics: “Of course we’re worried. This is our hard-earned money. I don’t think the market plunge is over yet.”

Speculating more lucrative than saving

Mr Wu has been speculating in shares for years. He is one of the many Chinese who discovered with glee that they could make more money by gambling on the markets and not only spend their money to buy consumer goods. This was a faster and more lucrative way of making money than saving.

Now, an estimated 60 percent of students, business people and even migrant workers and farmers try their luck on the markets by buying and selling shares:

One 30-year-old farmer explains: “We simple people have it hard. There aren’t that many possibilities for investment in China. The stock market is a good place and it is also a lot of fun.”

No fun anymore

However, it’s not so much fun right now -- with the world markets plunging daily, despite governmental bail-outs. Many Chinese are worried about the future.

Beijing insists China has massive currency reserves and economic growth will not be affected by the financial crisis.

But high inflation is making it hard for many to believe the government.

“Prime Minister Wen is part of the government so he wants us to trust him;” says Mr Wu. “But look at the situation here. So many factories have had to close. And the Chinese media are not reporting about that. I am not optimistic.“

“China is not open so nobody really knows what the Chinese government is really doing. Will it give the banks money or not? At least in the United States the population is being told about what is going on. But we don’t get any proper information.“