Investors and politicians have been whistling past the Chinese graveyard for far too long. The smarter observers were already warning that China’s impressive growth record may have been to some extent fabricated. The repressive Chinese government could now be in trouble, and the world could be in for a bumpy ride
China’s recent stock market meltdown isn’t the end of the Chinese miracle — that already happened.
Instead, the 30 percent plunge in stock prices in just a month — wiping out $3 trillion worth of wealth — is just more evidence that China’s high-flying days are over.
The big question is whether the Communist government can contain the stock collapse, focus on needed economic reforms and, most of all, maintain the confidence of the Chinese people.
First, a bit of perspective. The stock market rocketed up 140 percent from July 2014 to July 2015. So a 30 percent drop is a big, but not unexpected, correction.