China Emerging_ 1978-2008 - Xiao-bo , Wu [69]
Meanwhile, the Chinese stock market entered a kind of “mass mania.” Within the space of half a year, shares surged upward. The price-earnings (PE) ratio was as high as fifty or sixty, in some cases, one hundred to one thousand. Every day, some three hundred thousand new stock accounts were opened, not only by white-collar urban residents—old hands at managing money—but also college students, farmers, and peddlers; in fact, anyone. The pawnshop business was thriving. Many people pawned their house to the bank and then charged into the market. They might have never heard of a PE ratio. One shareholder created a song on the Internet, “I’ll hold on till I’m dead, I won’t sell,” which became the ring tone on many people’s cell phones. The song went, “Won’t be happy till my shares have doubled, won’t sell till they
Ceremony honoring the 2,556th anniversary of the birth of Confucius is held on September 28, 2005 at the Confucian Temple at Qufu, Shandong Province.
Advertisements everywhere, plastering everything in sight.
do,” and so on. By May 25, the number of accounts opened via the exchange companiesattheShanghaiandShenzhenexchangeshadbrokenthroughthe 100 million mark.
If the stock market craze had reached a high fever, the craze in housing prices and the stories of sudden wealth were stupefying.
Housing prices had doubled, and even tripled, in many cities. With the approaching 2008 Olympics, Beijing prices were skyrocketing, rising every week. One could not find anything for less than RMB 10,000 per square meter within the Fifth Ring Road, and even at that price, the supply could not meet the demand. Buyers queued up all night waiting to buy houses, afraid that in this lifetime, they would never get another chance to enter into this market. One developer told a journalist that he was embarrassed by the profits he was making. This continued until the government put emergency measures in place by issuing a whole series of financial tightening measures. At the same time, it announced that more affordable houses and cheaper rental houses would be built and released, which brought the prices down to some extent.
Just as the prices of shares and housing surged upward, an unexpected thing occurred. During the so-called “May 1 Golden Week” of 2007 when everyone takes a vacation, tourists strolling around Lake Taihu noticed a green substance floating on the lake. In some places, it was so thick that it looked like a layer of paint. In other areas, large numbers of dead fish were floating belly up. Experts explained that this had been caused by the growth of blue algae. Due to this blue algae growth, the quality of water in Wuxi City and other parts of Jiangsu Province suddenly worsened. The water stank and could not be used for drinking; suddenly, there was a huge demand for purified water in supermarkets.
G L O S S A RY
May 1 Golden Week
Wu-yi , or May 1, was a time of traditional holiday celebrations in China. In 1999, the government issued regulations that increased the number of public holidays for the public. Spring Festival (Chinese New Year), May 1 (Labor Day), and October 1 (National Day) were each designated as three-day holidays, in addition to the days before and after that could be taken as holidays. Every year carried the possibility of three seven-day-long holiday periods. Due to the traveling and the resulting consumer spending, they became known as Golden Weeks. One of the motivations for having Golden Weeks was the impact of the 1998 Asian financial crisis. The government wanted to stimulate consumption and help the domestic economy. In 2008, the May 1 Golden Week holiday was cancelled; 2007 was the last time this holiday was celebrated.
Taxi drivers taking English lessons for the upcoming Olympic Games (Beijing, April 2007).
This blue algae incident shocked the entire