Shanghai Composite Crash 2015 Detail

About Shanghai Composite Crash 2015 Detail

The 2015 Chinese stock crash destroyed 3.4 trillion in wealth in a month. Margin financing, where investors borrowed to buy stocks, amplified the boom and bust. Over 20 million new stock accounts were opened in the first half of 2015, many by unsophisticated retail investors. The government encouraged the bubble through state media promoting stocks. When the crash came, the government tried increasingly desperate measures: cutting interest rates, suspending IPOs, arresting short sellers, and ordering state entities to buy. Over 1,400 companies halted trading, freezing half the market. The crash undermined confidence in Chinese financial management and revealed the risks of state directed markets.