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U.S. stocks rebound after punishing day, but China’s market slides again - The Washington Post
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China takes a different approach to the stock market declines on August 24-25, 2015, after the earlier failed interventions in July and early August called into question the transparency and integrity of the financial markets. The main Shanghai index opened 6% lower on August 25, and ended down 7.6%. This time the government let the market find its own level. Li Jiange, vice chairman of state owned investment company Central Huijin, wrote in his blog post that "The trade volume of the market can reach 2 trillion yuan ($300 billion) a day, which means if it collapsed no one could save it...The issues of the market should be handled by the market itself." In July and the early part of August Central Huijin was reported to have intervened to support the market. On Aug. 14, the China Securities Regulatory Commission (CSRC) stated achange in policy to intervene "only when the market changes dramatically and introduces systemic risk." It is important to note that even with the 40% decline in the market index since June 2015 peak, it is still up 35% compared to the prior year.
China's different approach to the stock market declines August 24-25, 2015, following the earlier failed intervention in July and early August
08/25/2015
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U.S. stocks rebound after punishing day, but China’s market slides again - The Washington Post
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Efforts to rein in short term borrowing using riskier bonds as collateral for short term loans. Large increase in the use of margin financing creates problems of speculation. In one month alone, for November 2014, the Shanghai Stock Exchange composite makes a gain of 25%.
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China's failed intervention in stock markets in July 2015 and change in policy August 24-25, 2015
07/28/2015
China's Shanghai Composite Index declined by 8.5% to 3725 on July 27, 2015. About two thirds of the 1114 companies on the Index declined by over 10%, the maximum allowed under the market rules. Many of China's largest companies are listed on the Index. The Shenzhen Index declined by 7%. China's effort to prop up the market have failed.
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China Stocks Tumble 8.5%, Calling Into Question Beijing’s Market-Rescue Effort
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Chinese Retail Investors Flee Plunging Markets
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Central Huijin, part of China Investment Corporation (CIC)
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Chinaâs Sovereign Wealth Fund Buys Shares in Major Banks
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Central Huijin Raises $7.94 Billion in Bond Sale
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China Securities Regulatory Commission
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Chinese Stock Slump Contributes to Global Market Weakness
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The Man Tasked With Stopping China’s Stock Selloff
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U.S. stocks rebound after punishing day, but China’s market slides again - The Washington Post
Washington Post 08/25/2015
The Quiet Side of China’s Market Intervention
Wall Street Journal 01/13/2016
Chinese Securities Regulator Is Out, but Little May Change
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Beijing Appoints Regulatory Chief
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Xiao Wang, chairman, China Securities Regulatory Commission, March 2013 -
07/08/2015
Wang is former head of the Bank of China, one of four large state owned banks. A WSJ report shows that under Wang as CEO of the bank in 2009 it was the least profitable and the most likely to ramp up lending at the government's request. As a savy politician he was appointed to the Party Central Committee in 2012 and to the position at the regulatory body in March 2013. In efforts to meet party directions Wang has moved in conflicting directions, clamping down on margin financing and as the market selloff worsened even loosened restrictions for loans on homes to invest in the market. The huge surge in the market and the Shanghai and Shenzen stock exchanges is now followed by a selloff in July 2015, which the government has no experince in handling following China's experiment with its own state oriented form of capitalism since 1990. The government plans to allow state owned enterprises with large debt to reduce the debt by investing in a surging market may be based on an erroneous assumption on how equity markets work. Lack of prior experience with equity markets on the downside is another handicap in China.
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The Man Tasked With Stopping China’s Stock Selloff
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Beijing’s Response to Stock Selloff Reveals Deep Insecurity
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Why China’s Stock Market Bailout Just Might Work
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Memo to China: Your Market Moves Are Doomed to Fail
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Cooling of China’s Stock Market Dents Major Driver of Economic Growth
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Wall Street Journal 07/28/2015
China's stock market regulators and the failed intervention in the stock market in July-August 2015
08/05/2015
Grouped Articles
China’s Response to Stock Rout Exposes Regulatory Disarray
Wall Street Journal 08/05/2015
Wall Street Journal 08/07/2015
China Woes Send Stocks Into Tailspin
New York Times 08/20/2015
China to Flood Economy With Cash as Global Markets Lose Faith
Wall Street Journal 08/24/2015
China’s economy is in big trouble. But it is not collapsing. - The Washington Post
Washington Post 08/25/2015
U.S. stocks rebound after punishing day, but China’s market slides again - The Washington Post
Washington Post 08/25/2015
The lack of a strong connection between China's stock markets and the economy in August 2015, with a growing services sector
08/25/2015
Linked Articles
China’s economy is in big trouble. But it is not collapsing. - The Washington Post
Washington Post 08/25/2015
U.S. stocks rebound after punishing day, but China’s market slides again - The Washington Post
Washington Post 08/25/2015
China takes a different approach to stock market declines on August 24-25, 2015, after the failed intervention in the stock market in July 2015
07/08/2015
Linked Articles
U.S. stocks rebound after punishing day, but China’s market slides again - The Washington Post
Washington Post 08/25/2015
The Man Tasked With Stopping China’s Stock Selloff
Wall Street Journal 07/08/2015
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