China Confronts the Pain of Deleveraging, and Blinks
Beijing is wavering on its commitment to restrict debt as stock and commodity markets slump.
The easy part just cost the stock market $460 billion.
Photographer: China Photos/Getty Images
China’s falling stock market has prompted a flurry of activity to prop up prices. From delaying forced sales of pledged stock to turning on the credit engine again, authorities see the declines as emblematic of concerns over the economy.
Investors have pulled about 3.2 trillion yuan ($460 billion) out of the market this year, according to net capital data from Wind, a financial information company. The exodus is even more striking given that foreign investors piled in after MSCI Inc. added A shares to its benchmark indexes. Absent those inflows, the slump would have been even worse.