The Value of China's Companies

Recently, there has been much talk of the valuing of China's stock market and inherent value of many of China's large corporations. American investors and analysts believe that companies such as, Petrochina, which recently became the largest corpartion in the world, are overvalued in China's current system. The American investors all believe that in the next few years that China's economy will stumble and have a major meltdown due to overconfident investors. I believe that the American investors are speculating as to why they believe the corporations are overvalued. Petrochina and other corporations would not overvalue themselves, realizing that by doing so could cause their entire company to fall in the event a bubble occurred in China's economy. This entire ordeal is another case of people, especially those of the Western world, making assumptions not based on fact but based on what they believe to be true. Much like this blog, American investors are merely speculating at something which they have no clue.