After gaining for almost one and a half years, China’s stock markets
suffered a serious setback after November 2007. Figure 1 shows the trend
of the SSE Composite Index in the past two years. It rose dramatically
from its lowest point in late 2005, increasing 129.8% and 96.6%
respectively in 2006 and 2007. However, when PetroChina moved its
listing back to Shanghai from Hong Kong on 5 November 2007, the market
dropped sharply the following week