Why does China hover 3,000 points all year round, in stark contrast to other worlds**, all the way down, showing no signs of recovery. We can't help but ask, why is that? Is it because of a lack of funds? Is it because of the poor fundamentals of the market? Or is it because of the interference of external forces? In fact, none of these are the main problems. The real reason lies in the lack of a basic framework and the lack of relevant regulation.
Let's take a look at the remarks of the new village chief yesterday, which elaborated on the main problems of China. First of all, it is excessive financing without taking into account the interests of investors, especially small and medium-sized investors. This is not uncommon, and many companies resort to over-financing in pursuit of higher growth speeds, only to suffer investors. For example, in order to expand the scale of its business, a company frequently conducts equity financing, but does not have a clear development plan and profit model, resulting in a stock price all the way to the top, and investors suffer huge losses.
Second, all kinds of counterfeiting behaviors have been repeatedly prohibited, and regulatory measures are ineffective. Fraud has become a common practice in China, with many companies using fictitious results to attract investors, but regulators lack effective means to combat it. For example, a company publishes a fake financial statement that exaggerates the company's earnings, and as a result, investors are misled and end up suffering losses. However, regulators are often helpless against such violations, and lack effective penalties, leading to market chaos.
Third, there is a lack of effective management tools for malicious short-selling and malicious stock price promotion. In China, some investors will take malicious short-selling or malicious stock price promotion in order to obtain improper benefits, but the regulatory authorities lack effective management tools for such behavior. For example, a certain ** was maliciously raised, which led to the blind follow-up of investors, and eventually caused the collapse of the stock price, but the regulatory authorities were powerless to effectively curb such behavior.
Finally, the problem of major shareholders infringing on the interests of small and medium-sized investors is also a difficult problem that needs to be solved urgently. In China**, some major shareholders have embezzled the interests of small and medium-sized investors through various means, but the regulators have failed to effectively stop such behavior. For example, if a major shareholder of a company makes a large amount of profits through insider trading, but small and medium-sized investors suffer losses because they are ill-informed, the regulators are often helpless to deal with such behavior.
To sum up, the key to the long-term downturn in China is that the original market framework has serious flaws and poor supervision. This not only made investors lose confidence, but also kept China away from the world's development trajectory. Therefore, we urgently need to strengthen supervision, establish a sound market mechanism, and protect the legitimate rights and interests of investors, so that China can get out of the trough and usher in new development opportunities.