Skip to content
Subscriber Only
Businessweek
Economics

Here's Why China's Stock Rally Will End in Tears

Here's Why China's Stock Rally Will End in Tears
Photographer: ChinaFotoPress via Getty Images

China’s stocks are on a tear. This week saw the biggest jump for the market’s benchmark in almost six years—up 9.5 percent—and set a new milestone, with turnover breaking through the 1 trillion yuan ($163 billion) mark for the first time.

The Shanghai Composite Index is up some 40 percent since the middle of the year and 21 percent in just the past month—more than any of the 93 other indexes around the world tracked by Bloomberg. Meanwhile, investors are rushing to open trading accounts at a rate not seen for the past few years.