{"id":29333,"date":"2015-08-27T18:56:36","date_gmt":"2015-08-27T16:56:36","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=29333"},"modified":"2015-08-27T19:22:44","modified_gmt":"2015-08-27T17:22:44","slug":"29333","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/29333\/","title":{"rendered":"Does China Protect Investors?"},"content":{"rendered":"<p>Jennifer Carpenter and Robert Whitelaw write: \u00a0The government promise of investor protection runs deep in China. To stand by and let the stock market seek its own level will take a strong stomach. In a country where markets are routinely managed and defaults are rare, investors may feel betrayed by the government\u2019s lack of direct stock market intervention to mitigate the 15 percent drop this past Monday and Tuesday, especially after the propping up we saw last month. To let the market reveal new pessimism about China\u2019s growth prospects will even further test the nerves of a government accustomed to managing information flow. <a href=\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/08\/Does-China-Protect-Investors.pdf\" target=\"_blank\"><strong>\u00a0Does China Protect Investors<\/strong><\/a><\/p>\n<p style=\"text-align: center\"><a href=\"http:\/\/www.w-t-w.org\/en\/29333\/chinese-investors\/\" target=\"_blank\" rel=\"attachment wp-att-29335\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-29335\" src=\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/08\/Chinese-Investors.jpg\" alt=\"Chinese Investors?\" width=\"650\" height=\"360\" srcset=\"https:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/08\/Chinese-Investors.jpg 650w, https:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/08\/Chinese-Investors-300x166.jpg 300w, https:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/08\/Chinese-Investors-500x277.jpg 500w\" sizes=\"auto, (max-width: 650px) 100vw, 650px\" \/><\/a><\/p>\n<p>However, while this week\u2019s monetary policy measures targeted at the broader economy may be warranted, direct stock market intervention causes more problems than it solves. If China\u2019s regulators can stand their ground, this week\u2019s turmoil will provide them with an opportunity to clarify their stock market regulatory stance, reduce distracting policy uncertainty, let China\u2019s stock prices find their fundamental value, and continue on the promised reform path to more sustainable economic growth.<\/p>\n<p>Stock markets are messy and the price discovery process can be roiled by exuberance on the upside and panic on the downside. But these same emotions are precisely what underlie the market\u2019s ability to generate new information so effectively. Greed and fear drive investors to produce private information about potential gains and losses and buy and sell stocks accordingly. The clearing of these trades then aggregates this diffuse information into public signals to corporate managers and other investors, leading to more efficient corporate investment and capital allocation across firms.<\/p>\n<p>Our research suggests that, contrary to perception, China\u2019s stock prices have been surprisingly informative about future corporate earnings and have been generating useful signals for managers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Jennifer Carpenter and Robert Whitelaw write: \u00a0The government promise of investor protection runs deep in China. To stand by and let the stock market seek its own level will take a strong stomach. In a country where markets are routinely &hellip; <a href=\"https:\/\/www.w-t-w.org\/en\/29333\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-29333","post","type-post","status-publish","format-standard","hentry","category-finance"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/posts\/29333","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/comments?post=29333"}],"version-history":[{"count":4,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/posts\/29333\/revisions"}],"predecessor-version":[{"id":29339,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/posts\/29333\/revisions\/29339"}],"wp:attachment":[{"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/media?parent=29333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/categories?post=29333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.w-t-w.org\/en\/wp-json\/wp\/v2\/tags?post=29333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}