China is not Europe28 June, 2012, 16:38. Posted by Zarathustra
Surely, China is not Europe. Just like Greece is not Ireland, Ireland is not Greece, Portugal is not Greece, Spain is not Uganda (and that list goes on and on).
Although the Chinese economy grew fast, equities have had a few really pathetic years of performances as the mega-bear market started after 2007. Despite the Euro Crisis, European equities as a whole have been doing even better than Chinese equities.
From the bottom of the European benchmark on March 2009 to today, Chinese stocks as measured by Shanghai Composite and Hang Seng China Enterprises Index are not doing any better than Europe.
The chart below shows the performances of the three major benchmarks. Note that this is in local currencies terms.
If we instead look at the performances of the three major benchmarks in US dollar terms, Chinese stocks have done even worse.
From the day when Europe stocks bottomed after Lehman’s collapse, Chinese equities have never done any better, and then they have done worse over time.
Yes, China is not Europe. It looks even worse as far as stocks are concerned.