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Tea Bubble Bursts, Leaving Chinese Broke

Boom and bust results in a bitter fate for tea-growing heartland

By Rob Quinn,  Newser Staff

Posted Jan 17, 2009 10:51 AM CST
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(Newser) – Thousands of people in China's Yunnan province were left in the cold when the country's red-hot tea market collapsed last year, the New York Times reports. The newly affluent nation went wild for the Pu'er region's distinctive fermented tea—said to reduce cholesterol and cure hangovers—during its decade-long boom. Investors rushed in as a small group of traders cornered the market and drove prices sky-high—only to see prices crash as the cartel cashed out.

"Most of us are ruined,” said one the few tea traders to survive the market's implosion. “A lot of people behaved like idiots.” The speculative frenzy that surrounded Yunnan's tea market was mirrored around the country as the nation's nouveaux riches poured money into soaring stock and real estate markets, then saw billions of dollars in paper profits wiped out last year as the economy started to slump.

Dealers and horses transporting tea leaves walk on an old street May 20, 2005 in Kunming, Yunnan Province, China.
Dealers and horses transporting tea leaves walk on an old street May 20, 2005 in Kunming, Yunnan Province, China.   (Getty Images)
Nada 2008 'Cha Chan Yi Wei' Nannuo
Nada 2008 'Cha Chan Yi Wei' Nannuo   (Flickr)
Prices for Pu'er tea soared to over $150 a pound during a speculative bubble, then collapsed to less then a tenth of that as the market collapsed.
Prices for Pu'er tea soared to over $150 a pound during a speculative bubble, then collapsed to less then a tenth of that as the market collapsed.   (Flickr)
Officials shake hands in the Forbidden City during a ceremony to hand over a packet of tribute Pu'er Tea dating back over 100 years on March 19, 2007 in Beijing, China.
Officials shake hands in the Forbidden City during a ceremony to hand over a packet of tribute Pu'er Tea dating back over 100 years on March 19, 2007 in Beijing, China.   (Getty Images)
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COMMENTS
Showing 1 of 1 comment
justme
Jan 17, 2009 5:15 AM CST
Wall Street, Chinese style. Cold comfort in knowing that greed is a universal.

Speculators overheated tea market
Asia Times

World slowdown spreads to China
The Australian

World • Money

 
China • tea • Chinese economy • market bubble • speculation • recession depression

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