China's stock market will not resume its bull run next year, but its long-term outlook is positive on the back of the country's strong growth, a parliamentary researcher said on Friday. China's benchmark stock index in Shanghai has fallen 20 percent from a record high scaled last month but it has still more than quadrupled from its 2005 lows.
Policies aimed at using energy more efficiently and protecting the environment, along with rising labour costs, had changed the picture for Chinese companies, Zhu Mingchun, a National People's Congress (NPC) researcher, told a forum. "From a short-term perspective, it is not practical to expect listed firms to earn as high profits as they have been doing," he said.
"So next year, the stock market will not be as good as this year, though it could hit 10,000 points in the future," said Zhu, chief researcher on the financial and economic committee of the NPC, China's parliament.
The recent downturn had squeezed some air out of bubbles in the stock market, bringing it down to a more reasonable level, and authorities were unlikely to take harsh measures that would deflate it much further, he said. But he urged regulators to raise interest rates again and to increase the supply of stocks on the market by allowing state firms to float their locked-up shares.
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