The idea that "investment" implies "purchase of publicly traded equities" is really limited to a few countries at a few times in history. Even in the United States, more and more major companies are private, as it's no longer necessary or desirable to go public to tap all the capital one needs. As economic stratification deepens, I expect to see this trend continue.
In Asia, stock markets are for the people who aren't living on subsistence wages, but who don't have the money or connections to get in on big money private investment opportunities. There are also much fewer protections of minority investors than (was) common in the United States (this is by no means limited to Asia). In fact, the sentiment appears to be that, if you purchase a minority stake in a publicly traded business that has a dominant shareholder, well, then you deserve whatever abuse you get for being so stupid.
So it is not surprising that stock market returns in China are less than market growth as a whole.
The idea that "investment" implies "purchase of publicly traded equities" is really limited to a few countries at a few times in history. Even in the United States, more and more major companies are private, as it's no longer necessary or desirable to go public to tap all the capital one needs. As economic stratification deepens, I expect to see this trend continue.
In Asia, stock markets are for the people who aren't living on subsistence wages, but who don't have the money or connections to get in on big money private investment opportunities. There are also much fewer protections of minority investors than (was) common in the United States (this is by no means limited to Asia). In fact, the sentiment appears to be that, if you purchase a minority stake in a publicly traded business that has a dominant shareholder, well, then you deserve whatever abuse you get for being so stupid.
So it is not surprising that stock market returns in China are less than market growth as a whole.