It is scarily circular when a company can lend money that may end up financing the buying of its own shares. At Chinese brokerages this might easily happen: nearly one-fifth of the free float of their shares is owned by investors who have borrowed money to buy them (otherwise known as buying on margin.) Across the market as a whole, margin lending in China’s mainland A share markets has quintupled in a year, to reach $350bn. That is one-tenth of the market’s free float, according to broker estimates.

Such statistics should frighten, and the market is finally scared. Last Friday the Shenzhen and Shanghai indices dropped 7 per cent apiece. A correction was overdue. Before last friday, Shanghai’s index had returned 40 per cent in the year to date. Racier mainland sibling Shenzhen — which holds more technology and healthcare companies — had doubled in the same period. The indices were no longer cheap. Shenzhen trades at 30 times 2016 earnings estimates, half again as much as the US Nasdaq, although it offers more earnings growth. Still, the growth prospects have not inspired the rally: that has mostly come from a liquidity-driven re-rating. Economic recovery has yet to materialise.

Not all Chinese stocks look pricey. Further south languishes Hong Kong, where the China-related H share index trades on a mere 8 times 2016 earnings. It has returned a relatively paltry 11 per cent this year. With reason, perhaps. Its companies — mostly banks, property and carmakers — are not as sexy as cousins across the border (such as Shenzen’s Wuhan Golden Laser, trading on 666 times historic earnings).