Are China's Communists moving against stock-market flu in Shanghai?

What I have been calling "the Shanghai Flu" is the sudden Shanghai stock-market drop brawt on by over-heated buying of shares in flimsy companies that in some cases should never have been listed. The Chinese government does not regulate its financial sector well (not just its stock market, but its banks too). The Shanghai Flu was the sudden, drastic, unanticpated drop by the market there (China's leading stockmarket, and pace-setter for its cowboy, even sometimes its robber-baron, economy.

Chinese official news sources now are sending out signals that the Shanghai stock exchange and the brokerage and financial services built-up around it, in future will be held in rein by the Communist Party there. No mention, however, of the tension between party cadres in Shanghai and the central Communist regime of Hu Jintoa. An earlier leadership in Shanghai was repressed by Hu, now perhaps the factions supporting him are consoldiating power and "cleaning up" chaotic financial problems possibly accruing from neglect during the power struggle.

In any case, both centrally in Beijing and locally in Shanghai, there seems to be movement toward financial-sector reform. "Party chief of Shanghai pledges to cement financial hub status" (Apr3,2k7) People's Online Daily:

Shanghai is entering a new phase of its development and willing to once again assume a leading role in the country's reforms, said Xi Jinping, the newly appointed Communist Party secretary of China's largest city, one week after taking office.

The 54-year old Xi, who was appointed secretary of the Shanghai Municipal Committee of the Communist Party of China (CPC) on March 24, made the remarks when inspecting Shanghai's Pudong new area, one of the showcases of China's modernizing reforms.

Accompanied by vice mayors and other municipal officials, Xi visited the Pudong exhibition hall, the General Electric (China) research and development center, the China Unipay Shanghai information center and the Waigaoqiao bonded zone.

Xi pointed out that Shanghai has the obligation to take a leading role in the country's reforms and development.

The development of Pudong is a requirement of the CPC central committee and the State Council and part of the nation's development strategy, said Xi, adding that the municipality will speed up its development as an international economic, finance, trade and shipping center.

He said that Shanghai would continue to innovate in the financial sector by developing market systems, reinforcing financial supervision, safeguarding financial security and nurturing staff.

Source: Xinhua

China is fast becoming the world's leading economic power, its leading polluter, its leading labour-market as the poor migrate to new industrial areas under wage conditions far below the industrial West, and at the same time its leading consumer base as the various classes spend their income on everything from millionaire luxury items to a sure dinner for proletarian working families.