(See Graph) Chart Source: McKinsey Global Shanghai Composite Index has been up by 92.1% since 2000 outperforming almost all other major stock indices reflecting investors’ expectations for high future growth and returns. However, A separate McKinsey Global study calculates that based on the average return on equity (ROE), Chinese companies stocks are overvalued by 10-20%, and remain at a 20-30% premium above those in the United States and the European Union. The liberal lending and free capital post-financial-crisis has exacerbated inflationary pressure, created potential bubbles in housing, non-performing loans and assets, and widened the income inequality between regions.