A customer strolls into a bookstore, goes the popular Chinese joke, and tells the salesperson: “I’m looking for a book with no killers, but much bloodshed; with no love, but great regret; with no spies, but constant paranoia. Can you make a recommendation?” Just one, the salesperson replies: The State of the Chinese Stock Market.
Then there’s this one about a Chinese investor: “In the morning, he watches the K-line graph,” which tracks the perambulations of a share’s price. “In the afternoon, he goes to the hospital to watch his electrocardiogram.”
These are just two of many snippets of gallows humor widely shared in the dark days of the Chinese stock market. They have been few in number of late, but their impact has been keenly and widely felt. On May 28, the standard-bearing Shanghai Composite Index lost an astonishing 6.5 percent to fall to 4,838 points — by way of illustration, if the market fell at that rate for 12 days, which it almost certainly won’t, it would lose over half of its value. That plunge stands alongside another dip on May 5, 6, and 7, when the Shanghai index blipped lower, losing 8.5 percent of its value over three days. Even the smaller gyration in early May was severe enough to wipe out $1.4 trillion in paper value – meaning an average of more than $7,000 from each account holder — from China’s stock market, which was established in 1990 in the early days of the country’s economic reforms. It was described, at the time, as an “explosive fall” in Chinese press and social media.
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