Moody’s seems to blame China’s relatively small equity market on China’s growing debt. For China, this is fine (for now), for the following two reasons: First, the marginal investors in China are speculative individual investors. In the U.S., the marginal investors are institutional investors. In China, individual investors affect market prices. In China, individual investors are mostly speculators, which means that we often cannot trust their stock valuations, especially when the country’s accounting transparency is so poor.

Source: Forbes May 25, 2017 08:37 UTC