Wednesday, February 28, 2007

Chinese Economy Update

China's shares market plunged dramatically yesterday, with a market value loss of 1 trillion yuan. But a powerful rebounding recovered the index by 109 points today.

Apart from the rumors that stuck down the market yesterday, underground private funds are considered a major force that have been sell off shares after profit taking.

It's noteworthy that China's economic influence over the global economy is increasing remarkabley. The ripple effect of yesterday's market setback in China has caused declines of major stock markets around the globe, including New York, London, Tokyo and Toronto. Pessimistic market watchers warn that financial risk is accumulating quicly in the world's most populous country and may cause catastrophic economic crisis in the not too remote future . And yesterday's tumble may be just a pre-play of the potential shock.

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