China Stocks: Tick, Tick, Kaboom?: Financial News - Yahoo! Finance
Further out, the introduction of a vibrant futures market--in which investors could make money shorting stocks ripe for a fall--would add more stability. Though Shanghai expects to introduce index futures sometime this year, market watchers say regulators are reluctant to launch them during such frothy times. The key thing, though, is for Beijing officialdom to understand the risk--a market crash would annihilate the finances of millions of Chinese households with big exposure to equities.
"The government should actively state that there is a bubble in China and the wording should come from senior Chinese Communist Party leaders," says Shaun Rein, managing director of the Shanghai-based China Market Research Group (CMR). "There are too many new investors coming into the market with glossy eyes expecting to make fortunes." In fact, some 368,000 brokerage accounts were opened on May 8 alone, according to the China Securities Depository and Clearing Corp.