China Rewards its Own

The real story behind the PetroChina A share issue in Shanghai this week is not, contrary to almost unanimous press reports, that it is now the world’s highest capitalized company and for a day was worth over $1 trillion. That is nonsense anyway. The value is extrapolated from the market price of just 2 percent of the company’s shares. The real story is the massive handout that Communist Party and corporate insiders have given themselves and how so much of the Shanghai market is rigged to maximize returns to a favored few.

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