The Wall Street Journal writes, "Chinese stocks rose sharply Thursday, catching up to a rally in global equities after the market was closed for a weeklong holiday. The Shanghai Composite Index finished up 3% at 3143.46, putting its gains at nearly 7% since the lowest point of a painful summer selloff. The benchmark is still off about 39% from its June peak, although "a stabilization in the market is in sight," wrote Goldman Sachs analyst Kinger Lau in a note. Small to midcap stocks are still trading at expensive levels but overall the mainland market has fallen to trade at a ratio of 11 times price-to-earnings on a market-capped basis, making it more attractive for investors. Margin financing, the money from local brokerages that helped the market rally, has also unwound, falling nearly 60% from its peak in June, Goldman Sachs added."
"The United States is expected to sail warships close to China's artificial islands in the South China Sea within the next two weeks to signal it does not recognize Chinese territorial claims over the area, media reports said. The ships will sail within the 12-nautical-mile zones that China claims as territory around some of the islands it has constructed in the Spratly chain, the Financial Times and the Navy Times reported. Chinese Foreign Ministry spokeswoman Hua Chunying told a regular news briefing on Thursday that China was paying attention to such reports, and that it and the United States have maintained "extremely thorough communication" on the South China Sea issue," Reuters reports.