SHANGHAI — Dai Yunping has never traveled very far from his home here. But next month, the baby-faced 27-year-old will indulge in a weeklong tour of Southeast Asia to the tune of $6,500. Upon his return, Dai plans to move out of his parents' home and buy his own apartment in the old French Concession area.
Where's the money coming from? Not from his family, nor his $650-a-month job at a trading company. Over the last three years, Dai has made more than $200,000 in the stock market -- and now he's starting to live it up.
"I don't hesitate anymore to go to expensive restaurants," Dai said on a recent afternoon as he checked his accounts at a packed trading hall, a new $1,600 Hewlett-Packard Co. laptop slung over his shoulder.
Stock markets around the world have been wobbling amid turmoil in the American sub-prime mortgage industry and increasing worries about a possible economic downturn in the U.S. China's stock market has bounced up and down too, but it's mostly gone in one direction. The benchmark Shanghai composite index has climbed more than 350% since the start of 2006.
On Monday, in what has been a common pattern, the Shanghai index rose 1.5% even as every other stock market in Asia fell in the wake of the unexpectedly weak U.S. employment report Friday that raised fears of recession and rattled Wall Street.
Analysts point out that China's stock market marches to its own beat. It is largely closed to foreign investors, yet money is gushing in from speculators, state-owned companies flush with foreign reserves and savings-rich Chinese citizens who have limited investment options.
Nowadays in China, stock investors are busy counting -- and spending -- their profits, producing the first signs of an emerging wealth effect, a term that describes how consumption rises as investors see the value of their stock portfolios increase.
Leo Wong, general manager of Shanghai's Bentley dealership, is one beneficiary. This year, Wong's shop has been selling 10 Bentleys a month, for about $400,000 each on average. That's twice as many sales as last year. Wong figures half his buyers stepped up to a Bentley because of surging stock profits.
Managers of high-end restaurants and boutiques also say they've seen an increase in business in recent months. So have tour operators such as China International Travel Service, whose managers were stunned to see how quickly their new 12-day Mediterranean Sea cruise, at $4,000 a person, sold out this summer.
