China’s domestically listed equities, trading on 37 times trailing earnings, are among the world’s most expensive. This is partly predicated on rampant earnings growth. Double-digit rises in nominal gross domestic product do provide a big kicker. But earnings have been growing much faster than this. Excluding insurers, companies on the main A-share market posted a 59 per cent year-on-year jump in earnings per share in the third quarter of 2007. Much of this is from unsustainable gains, however, as companies mark equity investments to market under new accounting rules.