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How worried should we be about Chinese stock markets?

China’s stock markets are overvalued but perhaps not by as much as recent gains would suggest. The equity boom started when valuations were at a low level and, although shares now look pricey compared to other Asian markets, they are not yet at historic highs. Still, the speed of recent increases is unsustainable. What matters now is whether growth rates can be brought to earth without a hard landing.

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