What will happen when the China bubble bursts?

We may bemoan the UK housing bubble, but it's nothing compared to that in Chinese equities. And it won't just be Chinese investors ignoring warnings about the dangers of speculation who end up getting burned.

On Wednesday May 9, for the first time, the value of shares traded on China's stock markets was greater than the rest of Asia combined, and this includes Japan.

Volume on the Shanghai stock exchange was $33.2bn, while the smaller Shenzhen exchange saw $15.8bn worth of shares change hands. The combined total of $49bn was 21% higher than the previous Chinese record daily total and nearly double Japan's turnover on that day and triple the combined volume of Australia, Hong Kong, Thailand, Singapore, Malaysia, Korea, India, Taiwan, Indonesia, New Zealand and Vietnam. Turnover in Chinese listed equities is sky-rocketing. Just six months ago, trading volume on Chinese markets was only $5bn a day. The volume figures are even more astounding if you consider that day trading is not allowed in China.

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Brian has contributed to MoneyWeek with his expertise in investment strategy, for example how to quadruple your dividend income and how to navigate through the stock market in the 2008 financial crisis. He’s also touched on personal finance such as the housing market and the UK economy.