A last-ditch struggle for the Chinese Communist Party’s legacy and legitimacy could be playing out on the nation’s stock markets, as the regime desperately tries to prop up the last bright spot in the Chinese economy.
After a huge market rally over the last 12 months, China is in the midst of the world’s worst equities selloff in years. Shares tumbled again the week beginning July 6, even as Beijing introduced multiple new programs to plug losses.
The benchmark Shanghai Composite Index dropped 5.9 percent on July 8 alone, and it is more than 32 percent off its recent peak on June 12, wiping out more than $3.25 trillion in value. The smaller Shenzhen Composite plunged 16.2 percent the week beginning June 29, while the startups-heavy ChiNext declined 10.8 percent. Both of those exchanges are more than a third lower than their recent highs last month.
