BEIJING — It has been a tough three weeks for millions of regular Chinese who invested vital savings in the country's stock markets.
"I have been trading in the past few years, but this market plunge is unprecedented," said one retiree, referring to the nearly 30-percent drop since the markets peaked on June 12. By early July, $2.8 trillion in value had been wiped out.
"Almost all of the folks here have lost money in the last few weeks," added Wang, who asked to be referred to by his surname, like other investors NBC News spoke to on Monday. "Many of us here are retirees, we invest our pension money in the stock market."
The recent falls have sent ripples of panic through the legions of retail Chinese investors, many of whom borrowed heavily to invest in largely unregulated markets that doubled in value during the last year alone. Financial insiders agree that the government hastened the bull run in order to help fund heavily-indebted companies and manufacture a "feel good" consumer spending boost.
WNU Editor: For the new readers to this blog .... just a heads up .... I do consulting work for some Chinese clients on economic trends in both Canada and Russia, and I advise them on opportunities and risks if they are interested in investing. As to this crisis .... I have always been worried about this "Chinese bubble", and I have always agreed with Forbes contributor Gordon G. Chang that this was going to end bad. Well .... it just did .... and the costs are now running in the trillions. The repercussions from this collapse are going to be felt worldwide .... expect trillions of dollars in Chinese funds held in other banks and financial institutions to be returning to China to prop-up its financial institutions. Case in point .... the Chinese hold over a trillion dollars in U.S. debt, and I know that there is over $3 trillion in Chinese funds held in Caribbean banks ....so do not be surprised if in the next day or two you start hearing of large withdrawals occurring throughout the system. As to the political repercussions in China ... it is enormous .... the Chinese leadership is panicking .... and right now this is the number one story in every Chinese home. Who will be the first casualty .... I expect the Chinese PM to be fired by President Xi if this is not under control in the next few weeks.
More News On The Chinese Stock Market Crash
Nearly 25% of Chinese stocks have stopped trading -- CNN
China stocks fall again despite support measures -- Reuters
China stock market volatility catches Beijing off-guard -- Financial Times
China stocks tumble again after premier Li Keqiang fails to mention crisis -- The Guardian
'Don't Panic,' Say China's State Media, Amid Ongoing Market Mayhem -- Radio Free Asia
Chinese stock market crash far worse than Grexit -- Sydney Morning Herald
Everyone freaking out about China's stock-market crash is missing one thing -- Business Insider
The politics of China’s stock market collapse -- Daniel W. Drezner, Washington Post
Guide to China's Market Turmoil -- New York Times
China's stockmarket crash: A red flag -- The Economist
To save its stock markets, China is putting its whole financial system at risk -- The Quartz
2 comments:
The Chinese will repatriate their money? Not if they have a choice. There are many, many Greeks who have much wealth outside of Greece. Do you think they will repatriate their money? Various Greek governments have tried for decades to get that money back home.
Bob, These are official Chinese government institutions that have money abroad .... they will bring it back because they are told to. As to the many Chinese who have personally placed money overseas .... yes .... they are not going to bring their wealth back to China.
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