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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 32

China Business Intelligence No. 32

Samsung Economic Research Institute Beijing Office

June 18, 2007

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I. Are Chinese Stocks Overpriced?

Over the past year, Chinese stocks have continued their upward trajectory attracting more investors into the market. Savings accounts at commercial banks, on the other hand, have noticeably declined, indicating that a large portion of these funds have entered the stock market. As the market continues its upward climb, many worry that China's current stock market situation may come to resemble Japan's in the 1980's, which ultimately collapsed on an asset bubble and started ten years of deflation.

II. Competition Increases Between Google and Baidu

Google and Baidu are currently engaged in intense competition in the Chinese market, and are actively seeking cooperation with other communication service providers and terminal manufacturers. On January 5, 2006, Google signed an agreement with Motorola to work together in the wireless search business. Baidu in turn entered an agreement with Nokia to launch a wireless search service for mobile phones on March 17, 2006.

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