China’s A shares have dropped nearly 20 percent since the beginning of this year. However, unlike in 2015, when almost everyone was participating in the stock market, and thus got burned badly when the market crashed, the impact of the current market downturn is limited.
The weak equity market is unlikely to have much impact on the nation’s economic growth.
China’s GDP expansion rate moderated only marginally in the second quarter, edging down to 6.7 percent, from the first-quarter pace of 6.8 percent.
Personal incomes keep rising, and the trend of consumption upgrade stays intact.
China’s stock markets have every now and then gone through deep corrections. But such events haven’t dented the broader economic prospects, and the nation has, for the most part, remained the world’s fastest growing major economy.
The full article appeared in the Hong Kong Economic Journal on Aug 27
Translation by Julie Zhu
[Chinese version 中文版]
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