China’s markets: Taming the market tiger

According to Prime Minister Wen Jiabao, one of the Chinese government’s two economic goals is “a healthy and sustainable capital market”. It’s easier said than done. In 2007, the Shanghai stock market was unhealthy with an unsustainable fever. The index had risen six-fold in just two years US central bankers say that it’s impossible to identify bubbles in asset prices before they pop. But the Beijing authorities seemed to have clearer vision. They could see that if nothing was done to rest...