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China - Best is yet to come

IS the Chinese market crash, the end of the era as the CNBC pundits say?

On the contrary, this should be the start of the good period for China.

The Chinese markets had risen superbly, almost without a correction. A correction or sanitisation was called for. Which has now been duly given.

With the Olympics looming large in 2008, you can take for granted Chinese Gov is not going to do anything but be cautious. What we saw was perhaps the first dose of medicine. We can expect more in days to come. Chinese govt will certainly wont want to have a crash a month before Olympics. It would certainly want to show the best face of China- happy, rich, socialist and Govt loving people.

The govt will manage the economy in such a manner that before and during the Olympics the state of economy is in the finest state. In the most progressive state. With the world's eye on it, it may have to ward off the humanitarian/inequality barbs that come during the big show. The best defense against such accusations to have a strong progressive economy.

As I see it, China is like a gardener pruning his roses so that the best roses are timed for the flower show. The best is yet to come for China.

:) Falkor
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