Many reports over the last few years would have the world believe that China’s rapidly expanding economy was a juggernaut that could not be stopped by any outside forces.
However, over the last several weeks, China’s once powerful stock market has slowed down to a crawl and is possibly on the verge of a crash.
Over half the stocks that are traded on China’s stock markets have pulled their shares from trading after massive fluctuations the last several weeks.
According to a CNN Money report:
On Wednesday morning alone, hundreds of firms announced a halt in trading, according to a review of stock exchange filings.
Companies — particularly small and medium-sized firms — are clearly nervous about taking a nasty hit due to recent market fluctuations.
Stocks in Shanghai have dropped more than 30% since June 12 after reaching incredible highs. At one point this year, the benchmark Shanghai Composite had jumped about 60%, while the smaller Shenzhen Composite surged over 100%, putting total market cap in China at around $10 trillion.
But then the bottom fell out. Chinese stocks have now lost more than $3 trillion in value, and the swings are enough to give both investors and companies vertigo.
It would appear, at least for now, China’s unstoppable juggernaut of an economy is facing an uncertain market.