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| Version 0 | Version 1 |
|---|---|
| China shares fall after tax rise | China shares fall after tax rise |
| (about 2 hours later) | |
| China's main share index fell 6.5% in Wednesday trading following Beijing's decision to triple the tax on stock transactions. | |
| With the government aiming to cool the country's overheated stock markets, the main Shanghai Composite Index closed down 281.8 points at 4,053.1. | |
| Analysts said the dip in share prices was only likely to be temporary. | Analysts said the dip in share prices was only likely to be temporary. |
| The World Bank now predicts China's economy will expand 10.4% this year, but says it does not appear overheated. | The World Bank now predicts China's economy will expand 10.4% this year, but says it does not appear overheated. |
| The Bank had previously expected a 9.6% rise for 2007. | The Bank had previously expected a 9.6% rise for 2007. |
| Under Beijing's latest move to cool share prices, which came into effect on Wednesday, the stamp duty on share trading rose from 0.1% to 0.3%. | |
| The Shanghai Composite Index had risen 62% this year to Tuesday's record close and has quadrupled since the start of 2006. | |
| 'Healthy development' | 'Healthy development' |
| Chinese state media reported a government official as saying that the tax rise - which has been approved by the Chinese cabinet "is intended to help promote the healthy development of the securities markets". | Chinese state media reported a government official as saying that the tax rise - which has been approved by the Chinese cabinet "is intended to help promote the healthy development of the securities markets". |
| Strong demand from domestic investors, many of whom are using savings to buy shares, has lifted Chinese stocks. | Strong demand from domestic investors, many of whom are using savings to buy shares, has lifted Chinese stocks. |
| However, some analysts have warned that a stock market bubble is being created and last week, former Federal Reserve chairman Alan Greenspan warned that the Chinese stock market could undergo a dramatic correction. | However, some analysts have warned that a stock market bubble is being created and last week, former Federal Reserve chairman Alan Greenspan warned that the Chinese stock market could undergo a dramatic correction. |
| One of the main factors behind the surge in shares has been a willingness among ordinary people, such as students and pensioners, as well as investors and businesspeople, to buy shares. | One of the main factors behind the surge in shares has been a willingness among ordinary people, such as students and pensioners, as well as investors and businesspeople, to buy shares. |
| Instead of leaving their savings in bank accounts, many people are now using the cash to buy shares in the hope of receiving better returns. | Instead of leaving their savings in bank accounts, many people are now using the cash to buy shares in the hope of receiving better returns. |
| According to industry figures, 300,000 people a day opened brokerage accounts in China last week. | According to industry figures, 300,000 people a day opened brokerage accounts in China last week. |