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Justin Fox

Stock Market Misadventures, Chinese-Style

Chinese officials' interventions aren't so foreign.
Scary times in the Shanghai stock market.

Scary times in the Shanghai stock market.

Photographer: Kevin Lee/Bloomberg

Chinese officials have been doing some pretty interesting things over the past couple of weeks to stave off a stock price collapse. They’ve cracked down on short sellers, encouraged pension funds to put more money in stocks, suspended initial public offerings and dramatically eased borrowing requirements. Chinese speculators can now put up their houses as collateral to buy more shares, as my Bloomberg View colleague William Pesek pointed out earlier today. Meanwhile, Chinese brokerage firms have joined together, in an effort eerily reminiscent of attempts to stabilize the U.S. stock market in October 1929, to pump almost $20 billion into large-cap stocks. Oh, and the country’s central bank will reportedly provide financing to this stabilization fund. 

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