Why China's financial markets are inefficient

Good economic and financial information is available to investors in China but a sensible investor can’t compete with government intervention and market manipulation. Even Warren Buffett would be a speculator in China.

Last month’s award of the Nobel Prize in economics set off a great deal of chortling because one of the three recipients, Eugene Fama, received the award for saying that markets are efficient at capital allocation and another, Robert Shiller, received the award for saying they are not. Typical is this response by John Kay:

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