The dizzying plunge in the Shanghai and Shenzhen stock exchanges is testing China’s Communist rulers. As the realization sinks in that Chinese stock prices can decline, just as they have risen, the government is taking desperate, if clumsy, measures to control the free fall.
BERKELEY – The recent dizzying plunge in the Shanghai and Shenzhen stock exchanges has posed a unique test for China’s Communist rulers. So long as the markets were rising, the paradox of vigorous capitalist development overseen by the world’s largest and strongest Communist party confounded only academics and old-school Marxists. As the Chinese Communist Party elite and their relatives, foreign financial institutions, and some Chinese small investors (enabled by margin lending) made money on stocks, no one bothered to comprehend the mutant creature they were milking.
BERKELEY – The recent dizzying plunge in the Shanghai and Shenzhen stock exchanges has posed a unique test for China’s Communist rulers. So long as the markets were rising, the paradox of vigorous capitalist development overseen by the world’s largest and strongest Communist party confounded only academics and old-school Marxists. As the Chinese Communist Party elite and their relatives, foreign financial institutions, and some Chinese small investors (enabled by margin lending) made money on stocks, no one bothered to comprehend the mutant creature they were milking.