From Bloomberg, Jul 8, 2015, 6:56 pm
Templeton Emerging Markets Group calls it an act of “desperation.” UBS Wealth Management labels it “extreme.” And Wells Fargo Funds Management says it just “postpones the inevitable.” What do you think?
Regardless, the drop in value marks a significant economic “hurt” for China. And a signal of tough times for those nations that depend on China for trade.
Are we paying attention? What is the strategic plan now? For all of us.
The old plans are trash.
To read the entire article, go to http://bloom.bg/1J5dUUQ
Excerpts include: “The (reported) measure can be effective in the short term because you are not going to allow people to trade,” said Jorge Mariscal.
As the record-breaking boom goes bust, President Xi Jinping is intervening in an attempt to prevent the rout from eroding confidence in his leadership. The moves have cast doubt on the Communist Party’s pledge less than two years ago to give market forces a bigger role in the economy, which is part of its largest reform drive since the 1990s.
China isn’t the only market with a history of state intervention. During the 1998 Asian financial crisis, Hong Kong bought shares worth $15 billion to prop up the market. In the U.S., the Securities and Exchange Commission temporarily banned short selling on some shares during the global financial crisis in 2008.
WHAT HAPPENS NEXT?
Supporting the droping stock market is going to put a crimp in the Chinese government plans to finance infrastructure in emerging nations.