Stock Markets

During 2014–2015, China’s stock market experienced the inflation and bursting of a stock market bubble. In the year until 22 June 2015, the Shanghai Stock Exchange (SSE) Composite Index rose by 150 %%; over the next 10 weeks, it fell by over 40 %. The rise and fall of the technology-heavy Shenzhen stock market was even more dramatic. During the boom, millions of new investors opened trading accounts – lured by high returns and government encouragement. As boom turned to bust, these investors lost money and maybe a little faith in both the stock market and the government. The bubble raised questions about the maturity and stability of China’s financial system. The government’s aggressive intervention to halt the crash raised questions about its willingness to allow market forces to operate.