The State tried to stop the slide but the sellers just keep coming. Admittedly, even after the 12 down days and the huge weakness we've seen of late, the market is now only at a 3-month low. But the crazy selling will continue - at least 1,331 companies' shares were halted and another 747 fell by the 10% daily limit. As a result, sellers were locked out of 72% of the Chinese market. Crazy stuff going on there.
Share prices have lost a third of their value but they haven't hit the bottom yet. Experts warn that the Chinese stock market crash will affect the world. So I suppose we should all brace ourselves for the worst. If the Greek crisis sent stocks falling then a market crisis in China will have a greater impact . . . worldwide.
People need to put this in perspective... a longer term perspective. The Chinese market is still up 100% year over year. If a stock goes from 10 to 30, and then falls to 20.. did it lose 50% of it´s value? The Chinese gov´t created this volatility with their crazy enforcement of extremely low margin rates and requirements which is basically allowing everyday investors to play with 90% margin money.
That's some crazy stuff there. They are doing this while trying to artificially prop up the falling market. Capitalism.
From what I read on a newspaper column, the Chinese economy has recovered though not fully and said that the crash was not really a crash but just a temporary dip. I'm not into economic issues and I really don't know anything about that crash. It just caught my eye because I had seen this thread a few days back and had that feeling that I somehow need to post an update. Anyway, that recovery of the Chinese economy is a positive against the negative news of the Greek financial problem.
This week the CSRC is meeting with all large foreign investor groups. There were a lot of internet rumors floating around that foreign investors were responsible for the drop in the market. People I know working in finance here are a little uneasy, they're not sure whether the meetings this week are a formality or whether the CSRC is looking for people to blame.
My guess would be that the CSRC is definitely looking for a scapegoat. I doubt whether they want to take responsibility for creating a trigger happy investment class. It's a very easy story to sell to the less sophisticated retail masses as well.
