China stocks drop over 8%

Re:China stocks drop over 8% by _jgdh on Monday July 27, 2015 @09:23AM (#9954989)

Well put. However, you have to question the assumption that a stock market crash affects the economy in a significant way. For example, it would make sense if a lot of savings were lost, because that would affect consumption. However, that's not the case. As the Economist pointed out - "Less than 15% of household financial assets are invested in the stockmarket: which is why soaring shares did little to boost consumption and crashing prices will do little to hurt it." [1]

The fundamentals of the Chinese economy remain strong and the the Communist Party's panic-stricken attitude isn't helping matters much.

http://www.economist.com/blogs/freeexchange/2015/07/chinas-s...

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Re:China stocks drop over 8% by netcan on Monday July 27, 2015 @09:55AM (#9955187)

Possibly… I don't really understand how that stock market-economy relationship works.

It's also entirely possible that the CPC could survive a full blown high street recession. I don't really know. But this is a game of he thinks she thinks that I think. The CPC seems to be reacting (so far, not that severely) in ways that suggest they are worried. I suspect they are worried about political consequences, not just economic ones.

Nothing has happened yet. I'm just speculating. But, I'll prick my ears if scapegoats start emerging, arrests happen, someone is accused of intentionally sabotaging the chinese economy…

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Re:China stocks drop over 8% by tim333 on Monday July 27, 2015 @10:20AM (#9955328)

The governments actions seem a little worryingly like they don't know what they are doing. They shouldn't be trying to prop the market up but should worry about maintaining spending in the real economy so people don't lose their jobs and the like.

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Re:China stocks drop over 8% by studentrob on Monday July 27, 2015 @11:08AM (#9955604)

Also depends who accounts for that 15%. Rich who won't mind? Poor who may have trouble finding a united voice? Or bourgeois?

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