On July 1, when over 200 million shares of Sinopec Oilfield Service Corp. were dumped on the market and caused the share price to plummet by the maximum 10 percent in a day, Mr. Zhu, an investor in Toronto, smelled something fishy.
The pattern repeated the next day: massive selling of a state-affiliated firm (Sinopec itself is one of the largest state-owned enterprises in China), maxing out the 10 percent drop that is allowed by Chinese securities regulators. And this pattern was reversed in the week leading up to the plummet: huge volumes, driving the price way up, before a sharp peak, and the harsh crash.
The idea that there is something artificial about the Chinese stock market, something political and contrived, is by now not a controversial proposition.
