BEIJING: Which has been the better stock market investment over the past 20 years, the Chinese one or the US? Until I looked, I would probably have said Wall Street. It is human nature to over-weight recent data and, as last week’s new all-time high for the Dow Jones index confirmed, the US has led the pack since the financial crisis.
When I conducted a quick straw poll of my colleagues, however, half of them opted for Shanghai. China’s economy has been transformed over the past couple of decades, It is not unreasonable to assume that this might be reflected in its stock market. The answer is more intriguing. The Dow Jones Industrials and the Shanghai A Share index have risen by almost exactly the same amount since 1997. Broadly, they have both trebled in value, although they have taken a rather different path to get there.
