China's stock market is gripped by mania, which could intensify
Greed has prevailed in China's stock market: margin debt soared to bubble levels of 2015, and trading volume rose sharply.
Today, most China's stock indices are in the area of strong overbuying.
The enthusiasm of retail investors is also visible in the mania that has gripped the convertible bond market. Demand for these tools grew seven-fold compared to the previous year.
History tells us that these rallies of the Chinese stock market tend to accelerate as more and more people start to be afraid of being late for feast and jump on the leaving train. This creates serious problems for the authorities, who are trying to limit speculation under conditions of excess liquidity, locked inside the country by capital control legislation.