The booming Chinese stock market was responsible for up to half the earnings growth of companies listed in Shanghai and Shenzhen duirng the first six months of 2007 - a worrying trend that analysts say will exacerbate any market downturn.

Profits increased on average 71 per cent in the first half for the more than two thirds of listed Chinese companies that have published results. But profits from core operations increased at about 35 per cent, reckons Jerry Lou, equity strategist at Morgan Stanley: “I don’t think the market fully appreciates that half of the current earnings growth is a one-off thing . . . ”