CHINA is certainly not the first country to try to prop up a falling stockmarket. The central banks of America, Europe and Japan have all shown form in buying shares after crashes and cutting interest rates to cheer up bloodied investors.

Growth, though slowing, has stabilised recently. Other asset markets are performing well. Property, long in the doldrums, is turning up.

Money-market rates are low and steady, suggesting calm in the banking sector. The anticipated correction of over-valued stocks hardly seems cause for much anguish. Had the central bank stopped at cutting interest rates—justifiable support for the economy when inflation is so low—that would have been reasonable.

Instead, there has been a spectacle of ever-more drastic actions to save the market. Regulators capped short selling.

Pension funds pledged to buy more stocks. The government suspended initial public offerings, limiting the supply of shares to drive up the prices of those already listed.

Brokers created a fund to buy shares, backed by central-bank cash. All the while, state media played cheerleader. Far from saving the market from drowning, the succession of life buoys only pushed it further under water. Theories have flourished about why the government has waded in so heavily. The apparent desperation is, some believe, a sign that officials see a looming economic collapse, and are trying to staunch the wound before social upheaval ensues. That story is intriguing, but it is not the most likely.

Lost in all the drama about the stockmarket is that it still plays a surprisingly small role in China. Many stocks were bought on debt, and the unwinding of these loans helps explain why the government has been unable to stop the rout. But this financing is not a systemic risk; it is just about 1. If economic stability is not in peril, why then the panic? The most compelling explanation mxt forex politics.

The government has staked much credibility and prestige on the stockmarket. The sudden end to the rally is the first major dent in the public standing of the Xi-Li cash forex spot trading strategies. The botched attempts to stabilise the market only make them look weaker, giving succour to their critics.

China’s stock market crash explained - Indian Economy

But the biggest concern about the panicked policy about china stock exchange market in indian economy is what it says about the government's agenda. The actions of the past ten days have made abundantly clear that it is still the other way around: The failure of share prices to do their bidding is, in that respect, welcome.

It shows that the Communist Party, powerful though it may be, cannot indefinitely bend markets to its will. Chinese leaders should heed that lesson and get on with the challenges of liberalising their economy.

A relapse towards statism will not just set China back. It also will not work. Media Audio edition Economist Films Economist Radio The Economist apps. Other Publications Magazine The World In The World If. Media Audio edition About china stock exchange market in indian economy Films Economist Radio.

From The Economist Group Events Jobs Board Which MBA Executive Education Navigator Online GMAT prep Online GRE prep Learning. Register now Activate your digital subscription Manage your subscription Renew your subscription.

Latest updates Leaders Briefing United States The Americas Asia China Middle East and Africa Europe Britain International Business Finance and economics Science and technology Books and arts Obituary Special report Technology Quarterly Debates. The Economist apps Espresso Global Business Review World in Figures Events Jobs Board Which MBA Executive Education Navigator Online GMAT prep Online GRE prep Learning. China's stockmarket crash A red flag Free exchange Jul 7th by S.

What China’s market crash means for India’s economy — Quartz

A new Supreme Court case could rejigger electoral lines for the election. Democracy in America 11 hours ago. Americas 12 hours ago. The number of forcibly displaced people grew to a record in Graphic detail 12 hours ago. The outrageous death of Otto Warmbier.

Asia 13 hours ago. Prospero 13 hours ago.

5 ways China market meltdown can impact India | Business Standard News

Will the US Open be remembered for Brooks Koepka or Erin Hills? Game theory 17 hours ago. Another victim The outrageous death of Otto Warmbier A travel ban for American citizens to North Korea may be in the offing.

Northern pilot Finland tests an unconditional basic income. Daily chart The number of forcibly displaced people grew to a record in Tell us what you think of Economist. Need assistance with your subscription? Subscribe Contact us Help.

Chinese slowdown a risk for Indian economy - Times of India

Keep updated facebook icon twitter icon googleplus icon linkedin icon tumblr icon instagram icon youtube icon rss icon mail icon Subscribe to The Economist newsletters. Advertise Reprints Careers Media Centre. Terms of Use Privacy Cookies Accessibility Modern Slavery Statement.