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Chinese Stocks Take Another Tumble

Wed., Sept. 24, 1997

Stocks owned by Chinese investors tumbled for a second day Tuesday - bringing losses this week to about 13 percent - amid worries that the government will flood the market with shares in state-run companies.

The selling spilled over to stocks that are intended solely for foreign investors.

Speeches made by People’s Bank of China head Dai Xianglong and Vice Premier Zhu Rongji in Hong Kong over the past few days have advocated the listing of a large number of new shares, particularly A shares. The listings will raise funds for the clearing of state-sector debt, but have led to fears that the value of currently listed stocks will be diluted, analysts said.

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