When Jean-Claude Trichet, president of the European Central Bank, made a market-moving speech on June 5, the fortunes of Chinese companies were perhaps not at the forefront of his mind. Yet in another blow to the increasingly discredited theory that Asia’s markets are immune to troubles elsewhere in the world, Trichet’s comments sparked events that led to widespread losses among Chinese corporates and could yet have further troubling consequences.
Details of these losses were recently brought to light on the blog of Michael Pettis, a professor at Peking University’s Guanghua School of Management, and have been confirmed by traders interviewed by Euromoney. They are worried: the losses – although not sufficiently substantial...
