China's Stock Market Turmoil: Lessons and Implications

In: East Asian Policy, Band 8, Heft 2, S. 94-102

Abstract

Several factors contributed to China's market crash in 2015. One was the use of leverage trading. This includes both official margin trading as well as trading through various unofficial channels. The other was the introduction of the stock index future. Commercial banks were heavily involved in stock trading in this crash, mainly through providing leverages. The latest stock market fluctuations have taught the Chinese government several valuable lessons.