(November 30) – “In a dark,
cavernous room literally tucked
under the seats of the Beijing
Workers Stadium, hundreds of
Chinese spend time sitting on
coarse wooden benches squinting to
see red and green numbers march
down an electronic display
screen half as long as a football
field,” reports Elizabeth Rosenthal
in The New York Times this
morning.
“In groups of two or three, the
spectators, all men, chat and joke.
They smoke and drink tea.
Occasionally one grabs his wallet
and rushes to the transaction
terminals under the screen,
anxious to make a purchase.
“With its smoky haze and cement
floor littered with butts, the
room has the look of a subterranean
Off Track Betting office. In fact,
it is an office of the Beijing
International Trust Investment Co.
and Security Exchange — one of
China’s many new stock brokerages
for the masses.
“Small Chinese investors and
would-be investors have been
converging at such places all over
China, particularly in the past
couple of weeks since China and
the United States signed a trade
agreement that is expected to
lead to China’s membership in the
World Trade Organization.
“A slice of urban China, they
have come filled with hopes and
worries, theories and predictions
about the economic impact of the
deal, which theoretically will
give foreign companies far greater
access to China’s markets and give
Chinese companies increased
opportunities to sell goods
overseas.
“‘As soon as I heard the thing
was signed I put all my money in,’
said Liang Yongbin, a cheerful
31-year-old chef, who stood before
a screen of computer graphics at
the brokerage one recent day,
studying the saw-tooth path of
Chinese stock-price behavior.
“Since the trade pact was
signed Nov. 15, the domestic stock
markets have seesawed, rising and
falling on shifting opinions and
rumors about winners and losers
among Chinese companies.
“On the eve of the 135-nation
trade group’s ministerial meeting
in Seattle, some of the investor
euphoria surrounding the prospect
of China’s membership seems to have
abated. Part of the reason may just
be a broad realization that China
will not officially join the trade
group until sometime next year,
and that its power to influence
the meeting is unclear.
“But for long-term investors,
the more important fact is that
China and the United States have
a significant trade agreement that
is likely to greatly expand their
commercial relationship and could
make some Chinese stocks very
attractive several years from now.
And it should lead eventually to a
major overhaul of China’s bloated
state-owned companies,
freeing up economic resources for
more efficient use.
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