Download
HTML Embed
HTML EMBED
Click to Copy

Latest Episodes

Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace Morning Report
Download
HTML Embed
HTML EMBED
Click to Copy
Download
HTML Embed
HTML EMBED
Click to Copy
Marketplace

Chinese tech companies hit hard in stock crash

Ben Johnson and James Perla Jul 9, 2015
Share Now on:
HTML EMBED:
COPY

As China’s stocks fall after a market boom earlier this year, Chinese tech companies are the worse off. We spoke with Chris Low, chief economist at FTN Financial, to find out why.

Click the media player above to hear Marketplace Tech host Ben Johnson in conversation with Chris Low, chief economist at FTN Financial.

According to Low, the Chinese state fueled much of the enthusiasm around China’s stock market boom because it “looked like a terrific way of paying off debt by issuing new shares. So they absolutely encouraged it.” 

Low explains that the stock market boom was seen as “another part of China’s transition to a consumer driven economy and a way of sharing the wealth with the Chinese people.” 

The center of the euphoria, Shenzhen, has been hit the hardest. Likened to the NASDAQ, the Shenzhen market has smaller, more entrepreneurial companies. At the height of the boom, these Shenzhen tech companies were the poster-children for entrepreneurialism and getting away from state owned enterprises. However, now  “they are faring worse” says Low. And they may need some help from the Chinese government.

Low predicts that the state “may step in and start buying shares.” To explain, he compares the present situation to how “the old mainstream companies, the steel makers and the car makers were government owned enterprises” and says “so too the tech companies might become government owned enterprises.”

In Low’s opinion, this possibility reveals “one of the fundamental differences between China and the U.S. They don’t have this reverence of private markets that we have.” 

 

If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air.  But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.

Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.

When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.