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  • bitwise (edited 3 years ago)

    According to the other link that's been posted (article is here: http://www.vox.com/2015/7/7/8910293/china-stock-market-crash), the crash happened as a result of several rounds of increasing restrictions on "trading on margin"; using borrowed money to ride the stock market. Apparently the restrictions were so well-enforced that it actually chopped growth off at the knees, and the market fell into free-fall.

    I'm not saying that regulation is bad (it's not), but they clearly went overboard in an attempt to curb their bubble-like growth, and ended up causing the same kind of market contraction they were trying to prevent. Of course, I would assume it's likely that the bust would've been far more dramatic if they had let the bubble find its natural end.

    • Pockets69

      So this happened due too much or too strict regulation, but reading what you said it would end up happening anyway, so what should have been done to avoid it?

      • [Deleted Profile]

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