A new report by BNP Paribas looks at the extraordinary recent gains in China’s A-share markets and presents the case that China is in the middle of a major equity bubble.

BNP lays out the case for “irrational exuberance” in China and discusses the potential global ramifications of a bursting bubble.

Massive Gains

The S&P 500 Index has had a good year so far in 2015, climbing more than 1.8 percent. However, the gains of the Chinese markets put the S&P to shame.

The Shanghai Composite is up about 52 percent year-to-date (YTD) and 140 percent year-over-year (Y/Y), and the smaller Shenzhen Composite is up more than 115 percent YTD and 185 percent Y/Y.

“The scale and speed of these gains scream ‘speculative bubble,’” writes BNP analyst Richard Iley.

Telltale Signs

According to Iley, recent market movement in China shows…

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