China's Stock Drop, Felt by Average People, May Shake Leadership

choi

储百亮, 中国股市下跌增加全球经济风险. 纽约时报中文网, July 6, 2015
http://cn.nytimes.com/business/20150706/c06yuan/

, which is translated from

Keith Bradsher AND Chris Buckley, China's Stock Drop, Felt by Average People, May Shake Leadership. New York Times, July 6, 2015.

Quote:

"About $2.7 trillion in value has evaporated since the Chinese stock market peaked on June 12[, 2015--'with the Shanghai stock market down 29 percent in three weeks, its sharpest drop since 1992']. * * * The recent stock market losses are equal to three months of China’s economic output, which reached $10.3 trillion last year. Economists increasingly worry that the losses may lead to a sharp drop in spending by Chinese consumers who have lost much of their savings.

"The faltering of these measures [by Beijing 'to keep share prices aloft'] has put an embarrassing dent in the halo of unruffled supremacy built up around Mr Xi’s administration, and this weekend his government doubled down again, betting that it could beat bearish market sentiment into submission.

"It ['the plunge in the Chinese stock market'] could also have political ramifications. * * * Unlike his predecessor, Hu Jintao, Mr Xi has taken direct control of economic policy making. * * * 'There are significant forces who have their knives out for him and are waiting for him to fail,' Mr [Harry] Harding [何汉理, a specialist in Chinese politics who is a visiting professor at the Hong Kong University of Science and Technology] said.

"The effects are already being felt in homes across China. Four-fifths of China’s stocks are owned by individual investors, a far higher proportion than in Western markets, where institutional investors predominate. Chinese investors have 112 million accounts on the Shanghai stock market and 142 million accounts on the Shenzhen stock market; about 20 million accounts have opened this spring on each exchange, as novices have rushed to join a national fever of speculation.

Note:
(a) The CHINESE title waters down the English title.
(b) "There are significant forces who have their knives out for him" (in quotation 3)

the knives are out: "[a phrase found in] UK [followed by the preposition 'for']"
dictionary.cambridge.org/us/dictionary/british/the-knives-are-out
(c) Quotation 4 does not necessarily contradict my posting titled "China’s Bull Market Correlates Little with Consumption Uptick," where

Wei Gu, China's Weak Wealth Effect. Wall Street Journal, June 22, 2015 said, "In developed markets like the US, rising stock markets sometimes boost consumer spending and help spur growth. But in China, that effect appears to be nonexistent. The Shanghai Composite Index has jumped 122% in the past 12 months, but retail sales increased just 10% year on year in May and April, the slowest rate of growth in five years.  The reason? At the most, one in 15 Chinese trade stocks, compared with more than half of Americans. That means that much of the gains in equities are made by wealthier Chinese."

The NYT report today talks about absolute numbers of accounts "owned by individual investors" in China, whereas the WSJ report dealt with with the RATIO ("one in 15 Chinese trade stocks").




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