Domestic Chinese stocks trade at stratospheric price/earnings multiples. It’s essentially a closed market to foreign buyers. There is a search on to find a benchmark to see just how overvalued is the Chinese stock market. According to this story on Bloomberg, investors believe the most reasonable multiples are in Singapre, a reasonably wide open market. Using Chinese securities trading in Singapore as a benchmark, Bloomberg calculates that China’s CSI 300 Index would have to fall 65% to match the average muliple for Chinese shares traded in Singapore. Oops.