China: David versus Goliath

Hong Kong’s Hang Seng Index respected its new support level at 23000, confirming the primary up-trend. Follow-through above 24000 would offer a target of 26000*.

Hang Seng Index

The Shanghai Composite Index, on the other hand, continues to wander aimlessly between 2800 and 3100.

Shanghai Composite Index

With China’s one-country-two-systems we have a clear long-term comparison between the two systems: a centrally-planned, authoritarian and increasingly nationalistic Goliath and a more democratic, outward-looking, free-market David in Hong Kong. My money is on the little guy.

Hang Seng Index & Shanghai Composite Index

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