China’s stock market fall sounds alarm bells

Throughout 2022 the imperialist powers and global corporations applied tremendous pressure on the Chinese government to lift its successful anti-COVID public health measures. Their eventual success at the end of the year led to death of as many as 2 million people.

An investor walks past the stock price monitor at a private securities company in Shanghai, China, Tuesday, March 6, 2012. [AP Photo]

Today international finance capital is waging a campaign for Beijing to implement an economic stimulus package. If it does not, the threat is that the fall of the stock markets in Hong Kong and Shanghai will continue, leading to major financial problems.

Like the scrapping of the anti-COVID measures, this pressure is a demonstration of the fact that the nationalist policies of the Xi Jinping regime are directly subject to the forces generated by global capitalism with major political ramifications.

Above all, it illustrates the bankruptcy of the schema promoted in some pseudo-left circles that China, along with others, could form a counterbalance to the depredations and power of US imperialism and lead to the development of a so-called “multi-polar” world.

The fall in the markets is clearly causing concern at the top levels of the government. Most of the international finance that came into the markets at the beginning of last year had been withdrawn by the end.

On Tuesday, premier Li Qiang called for “more forceful and effective measures to stabilise the market and boost confidence.”

Hong Kong’s Hang Seng index, which fell almost 14 percent last year, has fallen a further 10 percent this year. It rose by 2.6 percent on Tuesday, its biggest rise for the year, but the effect was described as “short-lived” and markets in Shanghai and Shenzhen barely moved.

Since they reached a peak in February 2021, stocks in mainland China and Hong Kong have lost $6 trillion. That is roughly equivalent to the entire market capitalisation of Japan. In another measure of the extent of the fall, the Chinese market has never been as far behind Wall Street as it is at present.

In a comment to Bloomberg, George Magnus, a long-time China analyst at Oxford University’s China Centre said: “Xi Jinping’s people are almost certainly telling him that the rout in the equity market is a stability risk.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Get our latest downloads and information first. Complete the form below to subscribe to our weekly newsletter.

    Input this code: captcha