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July 13, 2015
Three weeks of market decline in China have worried investors and threatened the security of one of the world’s largest financial markets and fastest growing economy. The Shanghai Composite Index, one measurement of the markets’ status, has lost almost a third of its value in a month.
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Three weeks of market decline in China have worried investors and threatened the security of one of the world’s largest financial markets and fastest growing economy.
The Shanghai Composite Index, one measurement of the markets’ status, has lost almost a third of its value in a month.
85 percent of China’s traders are small investors, families and individuals, who have been hurt by the market fall. In recent years, Chinese state-owned media companies reported on how easy it was to make money by investing in stocks, and the government encouraged people to borrow money to buy stocks.
The crash has been compared to the burst of the U.S. dot com bubble in 2001, when many Americans invested in new, untested tech companies and lost most of their money.
Analysts worry that the new uncertainty about investing and stocks will push the Chinese government to tighten control over the economy and roll back recent progress towards a free market.
“China was supposed to be moving towards greater reforms in the financial market area. And everything they are doing at the moment is backsliding from that,” financial analyst Michael Every said.
Investors and financial experts also worry about the effects of a continuing market decline. The main index for Hong Kong, Japan, South Korea and Australia dropped this week.
