It is bound to be another year of numbers that will shake the world.

The trade surplus has tripled to more than £56 billion. Foreign investors continue to pour in money, £33.8 billion last year, at a rate far exceeding investment in India, the other rising Asian power. The government has just worked out that China’s economy was almost 17% larger than previously thought. Eager domestic consumers and a boom in services are creating new pools of wealth in cities across the land.

Little wonder, then, that for the first time in over a decade, the Beijing city government permitted its exuberant residents to let off fireworks in a celebratory binge that reverberated from the walls of the Forbidden City to the gleaming new business district that houses the China headquarters of Microsoft and Motorola.

But there is one damp squib that the authorities seem powerless to ignite. On the country’s stock exchanges in Shanghai and Shenzhen, it has been the Year of the Bear for as long as anyone cares to remember.

“There is a mismatch between the stock markets and the economy that the authorities are eager to correct,” said one investment banker.

High hopes for capitalism with Chinese characteristics, and the national mania for gambling, turned the markets into casinos in the 1990s. It did not take long for an excess of political interference and a lack of scruple among brokers to produce a bubble, followed by a collapse.

The final blow to confidence was dealt by the realisation that bureaucrats at state-owned companies, obedient to the call to privatise, were planning to unload £117 billion of stock on to the exchanges. Investors feared the issue of all this equity would deluge the markets and drive prices down for years to come.

The government scrapped the plans, told the state-owned companies to rethink their strategy and, last May, banned the issue of new shares until further notice.

As a result, Chinese domestic investors went on putting their savings in the giant state banks and the government continued to reinvest its reserves in US Treasury bills, helping to keep American interest rates low, property hot and consumer spending robust.

If that was a bonus for Americans, it became a headache for Chinese investors and macro-economic planners alike.

By one calculation, the index of A shares held by Chinese investors is down 77% on its peak in 2001. Shanghai’s Composite index is off more than 45% over five years and its average price-earnings (p/e) ratio is now 16 against 60 at the peak.

And China’s rapidly accumulating wealth inevitably spilled over into asset inflation, most conspicuously a property bubble in Shanghai that generated a stampede to buy, bitter disputes over land and a hideous construction boom. It began gradually deflating last summer.

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