Now, it's true that all of China's stock markets have gone crazy the past year—doubling in price—but none have gone crazier than the tech-heavy Shenzhen Index. Half its stocks with analyst estimates, as the Financial Times' James Mackintosh points out, have forward price-earnings ratios of 50 or more and 18 percent have 100 or more. By comparison, less than 10 percent of the stocks in the U.S.'s Russell 2000 have PE ratios of 50 or more and only 4 percent have 100 or more. It's gotten to the point that all a company needs is the word "technology" in it to make its stock go up, up, up. Beijing Baofeng—yes—Technology, an online video company, zoomed up the maximum 44 percent allowed when it IPOed, and then the maximum 10 percent allowed each day after for the next month until its stock had gone up by a factor of 17.
But why are China's stock markets partying like it's 1999? Well, part of it is that China's housing bubble might be bursting—new home prices fell 5.1 percent in January—and the only other place people can put their money is in stocks. Another part is that China's state-owned media companies have been saying for months that stocks look cheap, and people are listening. Especially people who haven't graduated from high school. Indeed, 67 percent of China's new stock investors don't have a high school diploma. And now that China has cut interest rates so much—and looks like it will keep doing so—they can borrow money to buy as many stocks as they want. And that's a lot. So-called margin accounts, which let people do this, more than doubled in 2014, and, even though brokerages have tightened their terms a bit, they're still growing.
So whether you want to call this a boom, a bull market, or a mania doesn't really matter. A bubble by any other name will pop just as much.