Thursday July 16, 2015

China's stock market intervention might do more harm than good

A billion dollars was being lost every minute in the Chinese stock market, prompting the Chinese government to pull out all the stops -- including banning large shareholders from selling stocks.

A billion dollars was being lost every minute in the Chinese stock market, prompting the Chinese government to pull out all the stops -- including banning large shareholders from selling stocks. (REUTERS/Aly Song )

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CHINA-STOCKS/

The world has been focused on Greek's debt crisis, but the stock market's slide in China has as much potential to wreak global havoc. (REUTERS/Tyrone Siu )

The Chinese stock market started on a steep, downward slide in June -- wiping out thirty per cent of its wealth, or some three trillion dollars, in just four weeks.

At one point a billion dollars was being lost every minute, prompting the Chinese government to pull out all the stops -- including some dramatic interventions, such as banning large shareholders from selling their stocks. 

That emergency treatment put a temporary stop to the bleeding, but in recent days, stocks have been moving downward once again.  

Zhiqiang Li is one of the 90-million or so Chinese people who do own shares, and have seen their savings take a hit. He says he's lost 100,000 yen, or $20,000 Canadian dollars in the past few weeks. Zhiqiang Li is an officer a Chinese media company in Beijing, and we spoke with him earlier, through a translator.
 

"I've lost so much money that I've worked so hard for. We don't earn much. It was all savings from our hard work. " -Zhiqiang Li


It's not just Chinese investors like Zhiqiang Li who are watching and waiting to see if the market can climb back up -- 
It's the whole world. 

This segment was produced by The Current's Sonya Buyting and Daisy Xiong. 
 

RELATED LINKS

♦ China's Stock Market Is Falling Again - Slate
♦ 3 charts that explain China's stock market fall - Business Insider
♦ China Crash Is 'Way Bigger Than Subprime' - Bloomberg
♦ ​Investors Doubt Beijing's Help - The Wall Street Journal