Second only to the US in GDP, the China Stock markets are significantly different than those of the US, as individual investors account for as much as 85% of trading, unlike the US and most other countries where professional money managers do most of the actual trades.
Because so much of the structure is different, it may be well to detail those differences to help in understanding how and why the Chinese markets may act differently than those of other countries, and to see risk in perspective.
Here's a current article that details some of the factors that should be watched as the markets seek stability.
China stocks fall again despite support measures | Reuters
In recent watching of the US TV networks, it looks to me as if many of the "experts" are playing catch-up while trying to understand the effect on the world markets. Some seem to think this is just a blip in a maturing market, while others present confused explanations and separate US Markets completely.
With Chinese Government controls currently seeming to be ineffective, many corporations are suing to halt trading, fearing crushing losses.
Unlike the US, Chinese government rules can require a time-hold on government support, meaning that government backing of funds can mean that recipients must "hold" the government backed entities for as much as a year.
China has bounced back from similarly disastrous problems in the recent past, so it may be premature to worry about a widening downturn, but understanding the way the Chinese markets work can't hurt.
edit to add.... In China, stocks represent 8% of household wealth. In developed nations, 20%.
Because so much of the structure is different, it may be well to detail those differences to help in understanding how and why the Chinese markets may act differently than those of other countries, and to see risk in perspective.
Here's a current article that details some of the factors that should be watched as the markets seek stability.
China stocks fall again despite support measures | Reuters
In recent watching of the US TV networks, it looks to me as if many of the "experts" are playing catch-up while trying to understand the effect on the world markets. Some seem to think this is just a blip in a maturing market, while others present confused explanations and separate US Markets completely.
With Chinese Government controls currently seeming to be ineffective, many corporations are suing to halt trading, fearing crushing losses.
Unlike the US, Chinese government rules can require a time-hold on government support, meaning that government backing of funds can mean that recipients must "hold" the government backed entities for as much as a year.
China has bounced back from similarly disastrous problems in the recent past, so it may be premature to worry about a widening downturn, but understanding the way the Chinese markets work can't hurt.
edit to add.... In China, stocks represent 8% of household wealth. In developed nations, 20%.
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