China: booming stock market - warning from central bank

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Chinese investors shrug off warning

 

By Jamil Anderlini in Hong Kong and Richard McGregor in Beijing

Published: May 8 2007 21:00 | Last updated: May 9 2007 03:22

 

China's stock market brushed off a central bank warning about the

danger of an asset bubble on Tuesday and rose to another record high

in a sign of the government's waning ability to control share prices.

 

At least three state-run newspapers ran prominent stories about the

warning from Zhou Xiaochuan, governor of the People's Bank of China,

in Basle on Sunday. When Mr Zhou was asked if he was worried about a

bubble forming in the stock market, he said he was.

 

But his comments, the latest in a series of official public statements

expressing alarm about the level of the market, were ignored by

investors, who bid up the index by nearly 3 per cent on Tuesday, the

first trading day after a week-long holiday.

 

The shares continued mild rises in Wednesday morning trading, with the

Shanghai Composite index edging up another 0.27 per cent to 3,960.7 at

02:18 GMT.