The bubble theory of China's stock market has always been one of the focuses of attention. Recently, the valuation of China's stock market has once again attracted widespread attention. In this regard, some commentators have pointed out that the bubble theory in China's stock market is not a fact, but a misunderstanding of financial operation. We'll take an in-depth look at this, including a historical review and valuation comparison.
First of all, one commentator mentioned that when comparing the stock markets of China, the United States and India, we can see that the bubble theory starts to spread when the Chinese stock market rises a little. However, stock markets in the United States and India have risen more, with few references to bubbles. This raises questions about the rationality and scientificity of the bubble theory.
As of January 16, the average P/E ratio of Hong Kong Hang Seng was 7.75x, the average P/E ratio of the Shanghai Stock Exchange was 12.26x, the average P/E ratio of the Shenzhen Stock Exchange was 19.78x, and the average P/E ratio of ChiNext was 25.83x. At the same time, the average US Dow Jones P/E is 25.5x, and the Nasdaq average P/E is 42.63x. These data suggest that the valuation of China's stock market is not significantly higher than that of other countries, and that the bubble theory may be misleading to a certain extent.
Some commentators have argued that the bubble theory fails to understand the nature of financial operations. In the modern financial system, virtual trading and the digital economy have become mainstream, and the virtual value of the stock market is part of its real value. At the same time, the P/E ratio itself is not the only measure compared to real wealth and interest rates.
The recent volatility in the stock market has also attracted a lot of attention. Some commentators have mentioned that China's stock market has fallen sharply recently, so the discussion of valuations is even more important. Before the stock market declines, we conducted a valuation comparison between Chinese and foreign equities to get a more complete picture of the bubble problem.
In general, for the bubble theory of China's stock market, we need to think deeply about the nature of financial operations, combine historical data and valuation comparison, and look at market fluctuations rationally. In terms of financial theory, it is also necessary to deeply reflect on those who have put forward the bubble theory in order to better guide the formulation of China's financial policy.